Financial Times FT.com

Car lending slashed as default threat rises among borrowers

By Andrew EdgecliffeJohnson in New York

Published: October 18 2008 03:00 | Last updated: October 18 2008 03:00

Banks and finance companies in the US are aggressively cutting back on making car loans, as growing numbers of borrowers fall behind on their payments and lenders' access to funding is squeezed in the credit crunch.

Lenders such as Wells Fargo, Capital One and GMAC this week all reported heavy cuts to their auto lending businesses amid signs that borrowers are increasingly affected by the slowing US economy and rising unemployment.

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