Wednesday April 1, 09:05 PM
Finance giant GMAC eases credit to revive auto sales
WASHINGTON (AFP) - US auto finance giant GMAC (NYSE: GOM - news) , the former financial arm of General Motors (NYSE: GM - news) , said Wednesday it was easing credit to dealers and expanding credit for consumers in a bid to rev up the stalled auto market.
GMAC Financial Services said it would earmark "at least" five billion dollars for consumer auto loans over the next 60 days and temporarily ease financing terms for dealers squeezed by tight credit conditions in the recession-wracked economy.
The measures include allowing qualified dealers to defer wholesale interest charges for two 30-day periods during the next 120 days and waiving the fee for dealers to post aged vehicles on SmartAuction, its online remarketing site, through June.
For retail customers, GMAC will lower some rates for new and used vehicle financing and lower the bar on applications for credit.
GMAC said it had financed more than two billion dollars in new and used retail contracts through March.
"GMAC has funding available to stimulate auto sales. We want to do our part to support both the US auto industry and individuals in the market for a car or truck," said GMAC president Bill Muir.
GMAC, reeling from the credit crunch and economic downturn, won approval on December 22, 2008, from the Federal Reserve to become a bank holding company with greater access to Fed credit lines.
The Treasury Department on December 30 unveiled a six-billion-dollar rescue package for GMAC to prevent its collapse, purchasing five billion dollars in preferred equity.
A day later, GMAC and its former parent GM unveiled plans to expand lending to jump-start the sputtering auto sector.
The rescue funds came from the Treasury's 700-billion-dollar Troubled Asset Relief Program and included a one-billion-dollar loan to GM.
GMAC is owned by GM and Chrysler parent company Cerberus Capital Management, a private equity firm.
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