Ford Credit’s charge-offs grew to $464 million in the first nine months of 2007, an increase of about 16 percent, while its growth in new contracts has slowed.

Costlier repossessions are helping drive credit losses for Ford Credit, the company said. The finance company reported that while repossessions are flat — at just under 2 percent of its U.S. Ford and Lincoln-Mercury portfolio — Ford Credit lost an average of $7,500 per repossession in the third quarter, up from $6,500 a year ago.

The increase in loss severity is partly an unintended consequence of generous incentives last year, including 0-percent financing for as long as 72 months. Cheaper loans made bigger vehicles with more content affordable.

“Higher content on bigger vehicles increases the amount financed,” Ford Credit spokeswoman Meredith Libbey said in a statement. “When you get into subvened business, people tend to finance more.”

If that bigger loan goes bad, it generates a bigger loss per loan.

Tom Webb, chief economist of Manheim, said that in addition to the size of the loan, a 72-month customer whose loan goes bad is not likely to have built up much equity. That would increase the loss on a repossession, he said.

GM’s stake in its former captive finance company, GMAC Financial Services, is losing money at a time when GM can ill afford it. In less than a year, GMAC has gone from being a profit center to a money-loser, dragged into the red by the subprime mortgage meltdown.

GMAC lost about $1.6 billion in the third quarter, compared with a loss of $173 million in the year-ago quarter. Through nine months of 2007, GMAC lost about $1.6 billion, compared with a profit of about $1.1 billion in the year-ago period.

In the automotive sector, GMAC made a profit of $1.3 billion after nine months, up from $644 million in the year-ago period.

Last year, GM sold 51 percent of the former General Motors Acceptance Corp. to a group of investors led by Cerberus Capital Management LP for $14 billion, to be paid over three years.

GM made a $1 billion capital contribution to GMAC in March. In the third quarter, GMAC injected $1 billion into its mortgage lender, Residential Capital LLC.