GMAC Loosens Credit, Car Dealers Applaud

McLEAN, Va. (Blue MauMau) - GMAC Financial Services announced that it will immediately resume auto financing for a broader spectrum of U.S. customers as a result of the expanded access to funding that the government granted yesterday. As a new bank holding company, the firm will modify credit criteria to include retail financing for customers with a credit bureau score of 621 or above, a significant expansion of credit compared to the 700 minimum score put in place two months ago.

GMAC's application to become a bank holding company was approved by the Federal Reserve Board. On Monday the company received an investment from the U.S. Treasury Department as part of the Troubled Assets Relief Program.

"The actions of the federal government to support GMAC are having an immediate and meaningful effect on our ability to provide credit to automotive customers," said GMAC President Bill Muir. "We will immediately put our renewed access to capital to use to facilitate the purchase of cars and trucks in the U.S." Muir added, "Opening access to credit for those with CB scores of 621 or better will allow us to return to more normal levels of financing volume, and should help in efforts to stabilize the U.S. auto industry."

GMAC's expanded financing policy and improved retail financing rates will apply to both new and certified used vehicles. Dealer wholesale financing remains a priority for GMAC, and is unchanged.

General Motors today jumped in to announce that it will offer a new reduced rate of financing as low as 0% APR for up to 60 months on select new cars and trucks. The reduced rate financing is available to qualified buyers from today through January 5, 2009 on many 2008 and select 2009MY vehicles.

The National Automobile Dealers Association says the actions of the federal government to support GMAC Financial Services will stimulate car sales and help some 20,000 auto dealers and 40,000 franchised locations to cope with the disappearance of car buyers.

"Credit is the lifeblood of the auto industry, both for consumers at the retail level and dealers at the wholesale level," says Annette Sykora, National Automobile Dealers Association chairperson and owner of two domestic-brand dealerships near Lubbock, Texas. "Lowering minimum credit scores from 700 to 621 will expand credit availability to thousands of potential car buyers and further increase consumer confidence at this critical time in the auto industry."

GMAC's application to become a bank holding company was approved by the Federal Reserve Board of Governors on Dec. 24. The company received a $6 billion aid package from the U.S. Treasury Department as part of the Troubled Assets Relief Program.

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