Wednesday, December 31, 2008, AM | Leave Comment
Reuters.com ran a story “GM, GMAC ease lending rules to entice car buyers” by Jonathan Stempel and Kevin Krolicki on Wed Dec 31, 2008. The article states that “GMAC modified its credit criteria so that it could lend to a wider range of potential customers, two-and-a-half months after significantly curbing lending.”
GMAC will now extend loans to retail customers with credit scores of 621 or higher, eliminating a restriction that required a score of 700.
Many analysts consider borrowers with a credit score of 620 or lower to be “subprime.” The median U.S. credit score is 723 (50% more than 723, 50% less than 723), according to Fair Isaac Corp’s unit myFICO.
In addition to financing, GM is offering
- Zero-percent financing on several vehicles
- Rates no higher than 5.9 percent on more than three dozen 2008 and 2009 models
- The offer expires on January 5
- Many eligible vehicles also carry cash discounts of $500 to $4,250
GM’s zero-percent financing is limited to buyers of the slow-selling sport-utility vehicles Chevrolet TrailBlazer and GMC Envoy, and three Saab models.
Read Reuters.com story in full: GM, GMAC ease lending rules to entice car buyers.
Moral of the story
With this kind of injection to the auto market, hopefully the auto sales will pick up across the board, among all manufacturers, and will help in lifting up the sagging economy.