GM financing arm investigated over subprime loans
GM bought the company previously known as AmeriCredit in 2010 for $3.5 billion and renamed it GM Financial. It allowed the automaker to have an in-house division to offer finance and lease options through dealers, since it sold off GMAC, now Ally Financial. According to Reuters, GM Financial has issued $2.15 billion in subprime-auto-loan-backed securities in the first six months of the year.
Subprime auto loans have been on the upswing this year, despite the recent financial crisis. According to a recent study from credit reporting company Equifax looking at data as of April 2014, $46.2 billion in auto loans have been extended to subprime buyers. That's an eight-year high and about 28 percent of the auto loan balance.
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