Automotive lending and mortgage firm GMAC has announced it will further restrict automotive financing by ceasing to offer any money to buyers with credit scores lower than 700. The move puts most American buyers out of contention for GMAC financing, as the average credit score in the U.S. is 680.

On the other hand, about 74% of the prime car-buying public holds a score above 700, meaning that while the majority of American citizens may not qualify for GMAC loans, the majority of those in the market will, reports Automotive News. "These changes in pricing and underwriting are related to the current market environment, which has reduced access to funds and increased the cost of funds. The company currently expects these actions to remain in place until the credit markets stabilize and accessibility improves," GMAC said in a statement.

Cerberus, which owns 51% of GMAC and also owns 81% of Chrysler, LLC, does not appear to be unhappy with its ownership of the financing company, however. Even with the incredibly tough mortgage market and the worldwide difficulties facing the credit sector, Cerberus is reportedly considering trading its stake in Chrysler to GM in exchange for full ownership of GMAC.

A report late last month that General Motors was considering 'strategic options' - industry-speak for sale - for its GMAC finance house is unsurprising given the current economic conditions, though it is potentially momentous. GM's decision last week to stop offering leases through GMAC is similarly important, though, likewise, not entirely unexpected.

The decision to opt out of leasing won't have a large impact on GM's bottom line, however. Only 2% of the company's U.S. volume came from leases in September, compared to 16.8% the year prior, reports Automotive News. Now GMAC's function for GM will simply more closely mirror the financial reality of the marketplace.

General Motors recently confirmed it has decided to sell Hummer and a French parts factory, and that move was taken as part of an ongoing series of asset sales that are designed to help the company meet its goals of cutting $10 billion of cost from its infrastructure while raising $5 billion in cash. Whether the consideration of a sale or other transaction with its GMAC ownership is among those assets to be sold is unknown.

GMAC posted a $2.48 billion loss in the second quarter of 2008, down about $3 billion from the second quarter of 2007. The primary cause of the loss was a $1.8 billion shortfall in the mortgage-handling GM Rescap branch, while the global automotive finance section lost $717 million.

Chrysler cut its leasing programs earlier this year as a pre-emptive measure to help reduce costs due to depreciation of vehicles coming off lease. Now it may be used as leverage in the purchase of an automotive lending and leasing agency, indicating just how turbulent these times really are for the automotive industry.