Consumer Car Buying Advice Blog

Less than a day after the government approved new financial supports for GMAC the General announces new finance rates for selected 2008 and 2009 vehicles.

GMAC’s woes

Here at Auto Credit Express Car Loans we have seen that, for the past two and a half months, GM, as well as its dealers, has been doing business at a distinct disadvantage to many other manufacturers. It was on October 13th that GMAC, its captive finance company, announced that due to a lack of capital, it would only be able to finance customers with a minimum credit score of 700.

Following that announcement, General Motors was left to scramble for retail vehicle funding options. At one point, the company was even offering bonuses to dealer personnel who were able to fund loans from sources other than GMAC. And if there were any doubters out there who might have felt as if GMAC was using the lack of capital as a ruse in order to obtain federal banking status, that theory was put to rest in November when GM was forced to terminate an incentivized certified used car program almost a month early due to lack of funds at GMAC.

GMAC and GM waste little time

So here we are at the very end of a very bad year. It has been just one week since GMAC won Federal Reserve approval to become a bank holding company and only two days since the U.S. Treasury Department approved $6 billion to help prop up its newest bank. Wasting little time, GMAC has announced that it is lowering its minimum credit score standard from 700 to 620. In addition, General Motors has announced a new vehicle incentive program tied to select 2008 and 2009 models.

Here is the press release from GM:

DETROIT – GM today announced new reduced rate 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 today through January 5, 2009 on many 2008 and select 2009MY vehicles (see list below). Of note, many of the vehicles listed below have stackable bonus cash and/or dealer cash ranging from $500 to $4,250.

“We’re very excited to offer this reduced rate financing through GMAC to encourage our customers to get back into the game,” said Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing. “This enables even more qualified customers to finance through GMAC at their local GM dealership, and provides additional financing capacity with conventional and reduced rate APRs for our dealers to make sales. With GM’s Financing That Fits, and the Red Tag Sale now underway that offers supplier pricing, customers have an opportunity to get a variety of extremely attractive offers through the end of the year.”

2008MY vehicles and offers for qualified buyers:

• 0% APR for up to 60 months on ’08 Chevrolet TrailBlazer; GMC Envoy; and Saab 9-3, 9-5, 9-7X

• 0.9% APR for up to 60 months on ’08 Buick Lucerne

• 1.9% APR for up to 60 months on ’08 GMC Yukon and Yukon XL; Chevrolet Tahoe, Suburban and Avalanche; Cadillac CTS, SRX, Escalade, DTS, STS and XLR

• 2.9% APR for up to 60 months on ’08 Buick Lacrosse; HUMMER H2 and H3

• 3.9% APR for up to 60 months on ’08 Chevrolet Equinox, Colorado Ext and Crew cab and Light Duty Silverado; Pontiac Torrent; GMC Canyon Ext and Crew cab, and Light Duty Sierra

• 4.9% APR for up to 60 months on ’08 Saturn Astra and Sky; Pontiac Solstice; Chevrolet Corvette and Heavy Duty Silverado; and Heavy Duty GMC Sierra

2009MY vehicles and offers for qualified buyers:

• 3.9% APR for up to 60 months on ’09 Chevrolet Cobalt; Pontiac G5; and Cadillac CTS

• 4.9% APR for up to 60 months on ’09 Pontiac G6; Chevrolet Malibu, Light Duty Silverado and HHR; Saturn Aura; and Light Duty GMC Sierra

• 5.9% APR for up to 60 months on ’09 Chevrolet Avalanche and Heavy Duty Silverado; and Heavy Duty GMC Sierra

The Bottom Line

It’s interesting to note, especially for those of us at Auto Credit Express Car Loans, that the government has given billions of dollars to Wall Street banks in the past few months with little or no result on the economy. It seems that this windfall has had, specifically, no effect on borrower’s ability to obtain loans in the marketplace.

But after receiving just a tiny portion of the amounts that have been lavished on such entities as AIG, GMAC immediately turns around and makes good on its promise to inject those funds into the economy as soon as possible. This, as the saying goes, “is how it’s done.”

Tags: new car employee discount

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