If you have less than stellar credit GMAC has a deal for you.
At the start of the Great Recession, General Motors and Chrysler were in desperate need of a federal bailout. GM made best use of the Troubled Asset Relief funds the government made available to them by passing savings on to customers. At the beginning of 2008 few buyers were willing to plunk down money for a new GM vehicle. The few who did had credit ratings that were less than excellent making them too high a risk for GMAC the financing arm of General Motors. The manufacturer made this money available to consumers in the form of an improved loan structure. They lowered their minimum credit score requirement making more loans available to more buyers.
Credit Scores
As the recession took hold GMAC was forced to increase its credit score requirement from 621 to 700, which made buying a new car an option only for a select few consumers. The release of two federal bailout packages freed up enough capital that GMAC was able to reduce their credit rating requirement to the heretofore mentioned 621.
GMAC President Bill Muir said, “We will continue to employ responsible credit standards, but will be able to relax the constraints we put in place a few months ago due to the credit crisis. We will immediately put our renewed access to capital to use to facilitate the purchase of cars and trucks in the U.S.”
Zero Interest
GMAC did not stop there in its effort to finance more cars, however. They also started a very aggressive zero percent interest auto loan promotion that ran for a full week. Despite this effort year over year sales were still down more than 22 percent, but this was not as bad as they anticipated before the zero percent interest deal was offered.
Now, if your credit rating is just 621 or higher you can take a share of the federal bailout money used to support the American automotive industry.
The Troubled Asset Relief fund money was released in October of 2009. As result of this, GMAC received $6 billion to be used to support the industry. By offering low interest financing options and reducing its credit rating requirement GMAC made its best attempts to encourage automobile buying and restore the industry.
“A” for Effort
Their efforts were among the best efforts to restore some calm to the troubled automotive sales market. It also served to restore confidence in the American car buying consumer by making the purchase of a new car a little bit easier for everyone.