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GMAC Loosens Credit

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The Associated Press

Published: December 31, 2008

NEW YORK - Easier auto loans for more people.

The struggling financing arm of General Motors Corp., rescued by $5 billion in federal aid on Monday, plans to use some of the money to make cars and trucks more affordable to a larger pool of customers.

It's the first time that a financial institution has said it will use money from the $700 billion bank bailout to offer more affordable credit to consumers.

On Tuesday, Detroit-based GM said it will offer zero percent or low-interest financing on some slower-selling 2008 and 2009 models as part of a year-end sales push - a move made possible by the newly available cash at the financing arm.

The GMAC funding, on the heels of the $17.4 billion automaker bailout approved by the Bush administration this month, gives some relief to auto dealers who had blamed the industry's steep drop in sales partially on a lack of affordable credit.

GMAC said Tuesday that as a result of the government aid it will resume offering automotive financing to customers with credit scores as low as 621, eliminating restrictions put in place two months ago as a result of the tight credit markets that mandated a minimum score of 700, an exceptionally good score.

GM said Tuesday that it will offer zero-percent financing for up to 60 months on the 2008 Chevrolet TrailBlazer, GMC Envoy and Saab 9-7X sport utility vehicles. The Saab 9-3 and 9-5 sedans also qualify for zero-percent financing.

The automaker is also offering financing between 0.9 percent and 5.9 percent on more than three dozen other 2008 and 2009 models, including many trucks and SUVs. The deal runs through Jan. 5.

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