GMAC: Government to get into car loan business

perfxn · 05-21-2009, 03:01 PM

GMAC: Government to get into car loan business
Douglas McIntyre
May 21st 2009 at 7:00AMText SizeAAAFiled under: Company News

The government figures that if car loans are scarce, car buyers will stay on the sidelines. To remedy this it will inject $7 billion into GMAC Financial Services, which finances GM (GM) and Chrysler auto loans. Based on the company's needs it could get an additional $7 billion.

Whether the government is right in its assessment of the car loan industry is hard to tell. Scores of banks also provide lending for the industry. No one knows for certain whether these banks would take up the slack if GMAC disappeared.

As the government hedges its bets to keep money flowing to car buyers, the question is whether access to credit will help revive the industry. Americans have become wary about taking on debt of any kind, even under attractive terms.

According to Bloomberg, "With GM facing possible bankruptcy following Chrysler's filing, the companies want a lender offering lower rates and flexible terms for borrowers to compete with Ford Motor Co. and Toyota Motor Corp."

Taxpayers should be concerned that the federal government is putting money into yet one more company where the return is uncertain. If the auto industry does not recover to the level of sales that it had four years ago, GMAC may have trouble making money. The only benefit to taxpayers is that they can get car loans that they do not want.

Douglas A. McIntyre is an editor at 24/7 Wall St.

This could be good for us!! and every one else to!!

Iwantone2 · 05-21-2009, 03:08 PM

Cool! Whats the source again? Could this mean good news or more trouble as far as loans?

hoozat · 05-21-2009, 03:10 PM

0.0% financing would be better... but I'll settle for 1.1

TJ91 · 05-21-2009, 03:14 PM

when will this go into effect, i want a lower finance rate

this really would help with car sales

perfxn · 05-21-2009, 03:18 PM

bloomberg and daily finance both have articles

fixxer56 · 05-21-2009, 04:28 PM

http://www.bloomberg.com/apps/news?p...d=aXJkDa7PO25c

Bloomberg links on GMAC loans

Vash · 05-21-2009, 04:38 PM

They are also taking over financing for Crysler.

z06invb · 05-21-2009, 05:35 PM

Wow...so I give the government my money...ok not give they TAKE my money....they then give my money to GMAC and GMAC then loans my money back to me and I pay interest on it.

Ok I think I have it straight.

GMtothecore · 05-21-2009, 05:38 PM

this could be good....

mmarcum · 05-21-2009, 05:38 PM

Bah, I don't believe there's any way that we will get better financing options for the Camaro because of this. Yeah, I'm a pessimist.

paulv7260 · 05-21-2009, 05:47 PM

Quote:

Originally Posted by z06invb

Wow...so I give the government my money...ok not give they TAKE my money....they then give my money to GMAC and GMAC then loans my money back to me and I pay interest on it.

Ok I think I have it straight.

05-21-2009, 03:01 PM	#1
perfxn Drives: 2SS RS Join Date: Oct 2008 Location: portland, OR Posts: 305	GMAC: Government to get into car loan business GMAC: Government to get into car loan business Douglas McIntyre May 21st 2009 at 7:00AMText SizeAAAFiled under: Company News The government figures that if car loans are scarce, car buyers will stay on the sidelines. To remedy this it will inject $7 billion into GMAC Financial Services, which finances GM (GM) and Chrysler auto loans. Based on the company's needs it could get an additional $7 billion. Whether the government is right in its assessment of the car loan industry is hard to tell. Scores of banks also provide lending for the industry. No one knows for certain whether these banks would take up the slack if GMAC disappeared. As the government hedges its bets to keep money flowing to car buyers, the question is whether access to credit will help revive the industry. Americans have become wary about taking on debt of any kind, even under attractive terms. According to Bloomberg, "With GM facing possible bankruptcy following Chrysler's filing, the companies want a lender offering lower rates and flexible terms for borrowers to compete with Ford Motor Co. and Toyota Motor Corp." Taxpayers should be concerned that the federal government is putting money into yet one more company where the return is uncertain. If the auto industry does not recover to the level of sales that it had four years ago, GMAC may have trouble making money. The only benefit to taxpayers is that they can get car loans that they do not want. Douglas A. McIntyre is an editor at 24/7 Wall St. This could be good for us!! and every one else to!!

05-21-2009, 03:08 PM	#2
Iwantone2 Voice Of The Voiceless Drives: CGM 1SS RS Join Date: Feb 2009 Location: OC Cali Posts: 9,610 View My Garage	Cool! Whats the source again? Could this mean good news or more trouble as far as loans? __________________

05-21-2009, 04:28 PM	#6
fixxer56 Thin Blue Line Drives: ABM 2LT/RS #10094 Join Date: Oct 2008 Location: SE Pa Posts: 1,386 View My Garage	http://www.bloomberg.com/apps/news?p...d=aXJkDa7PO25c Bloomberg links on GMAC loans __________________ One of the "Few Blue" Last edited by fixxer56; 05-21-2009 at 04:30 PM. Reason: added 2nd link

05-21-2009, 05:38 PM	#9
GMtothecore "That Guy" Drives: Camaro SS...........what else? Join Date: Apr 2009 Location: OOOOOOOklahoma where the wind comes sweepin' down the plains. Posts: 2,360	this could be good.... __________________

05-21-2009, 05:38 PM	#10
mmarcum Drives: 2010 Rally Yellow Camaro SS Join Date: Jan 2009 Location: East TN Posts: 291	Bah, I don't believe there's any way that we will get better financing options for the Camaro because of this. Yeah, I'm a pessimist. __________________ Delivered: Rally Yellow 2SS/RS (LS3) with black interior. Event code 1100 on 1/24 Event code 3000 on 3/24 Event code 3400 on 4/27 Back to event code 3000 on 5/1 Event code 3800 on 5/5 Event code 4B00 on 5/5 Event code 4200 on 5/22 Event code 6000 on 6/3! VIN# 2G1FT1EW6A9107395

05-21-2009, 03:10 PM	#3
hoozat Hoozat Drives: 87 vette, 67 mustang, 10 2LTRS Join Date: Feb 2009 Location: Rhode Island Posts: 79	0.0% financing would be better... but I'll settle for 1.1

05-21-2009, 03:14 PM	#4
TJ91 :chevy: Drives: 2LT/RS Join Date: Jun 2008 Location: Toronto Posts: 13,035	when will this go into effect, i want a lower finance rate this really would help with car sales

05-21-2009, 03:18 PM	#5
perfxn Drives: 2SS RS Join Date: Oct 2008 Location: portland, OR Posts: 305	bloomberg and daily finance both have articles

05-21-2009, 04:38 PM	#7
Vash Drives: 00 Blazer Join Date: Aug 2008 Location: Texas Posts: 5,100	They are also taking over financing for Crysler.

05-21-2009, 05:35 PM	#8
z06invb Drives: 2001 Chevy Corvette Z06 Join Date: Mar 2009 Location: Virginia Posts: 135	Wow...so I give the government my money...ok not give they TAKE my money....they then give my money to GMAC and GMAC then loans my money back to me and I pay interest on it. Ok I think I have it straight.

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