GM Loosens Credit Restrictions

In a rare instance of seeing an immediate impact on consumers from federal bailouts, GM’s financing arm, GMAC, will lower its credit requirements from a credit score of 700 to one of 621 to secure car loans. Last week, GMAC restructured to become a bank, then secured $6 billion in aid from the government just yesterday.

This should help GM dealers who had been looking to secure alternative ways of providing credit to buyers, including an agreement with Midwestern credit unions. The new requirements will go into effect immediately.

So, if you’ve been salivating over GM’s Red Tag Sale prices but have sub-700 credit, now’s the time to take a test drive.

Source: GMAC

Comments

[alex]

I opposed the bailout for banks, but at least i guess it is now going to go to trying to get the economy going again.(like it was supposed to do in the first place) Better than the banks stuffing their balance sheets

[SouthTX]

Wonderful, thanks to the credit laws made in 99, millions of people who couldn't afford an used car in a "Buy here, Pay here" lot, were given big mortgages because they "deserved" them, and now, they "deserve" cars... look at Mitsu, they did that they ended up in big trouble...

[Talley]

While this is a smart move by GM it's also a little late. Two work colleagues of mine ended up buying Fords since GM wouldn't qualify them for the financing special. One colleague said his credit score was 685 but two GM dealers said they didn't qualify for the special rate. Ford gave the same person 0% on the spot so that naturally played a role in them buying a Fusion instead of the Malibu.
My credit score is above 800 so locking in the financing special was a non-issue. I couldn't however get over the dollar store plastic interior of the Malibu. I gladly paid $1100 more for a similarly equiped Accord as it feels much more expensive than that.

[Ken B]

I hope GM is able to rebound but in the mean time they really need to fire their entire interior designer staff. The quality of most of their car interiors is still deplorable.

[sheth]

"I couldn't however get over the dollar store plastic interior of the Malibu. I gladly paid $1100 more for a similarly equiped Accord as it feels much more expensive than that."

I've been in both cars and there isnt a big difference in material quality. Malibu looks better inside and out. Accord has a fewer softer touch surfaces but its interior design has huge buttons that look like they belong in a Buick and there are large gaps between the dash and door panels. Its not nearly as impressive as the Honda loving media pretends. The Accord would never be mistaken for a luxury car- unless you consider an Acura luxury.

[sheth]

"I hope GM is able to rebound but in the mean time they really need to fire their entire interior designer staff. The quality of most of their car interiors is still deplorable."

compared to what? Toyota? The Vue's interior is better than the RAV4's. The Silverado has a better interior than the Tundra. Also check out the CTS, Malibu, STS, SRX, Enclave, etc. You are dealing with out of date stererotypes. GM's current interiors are at least as good as anything Toyota and Honda are selling.

[valero]

Providing more credit to a public that is already in debt up to its eyeballs doesn't sound like much of a plus.

We got into this problem because people who didn't deserve credit got it and defaulted.

GM may need to sell more cars to survive but will be doing it on the backs of those who can least afford it.

[David Thomas]

Didn't the news last month say Americans paid down their debt for the first time in years? I think everyone is being more responsible now. This will get the people who couldn't get a loan get a new car, not get a new car the can't afford necessarily.

[J]

sheth,
In regards to the following statement: Malibu looks better inside and out.

Please keep this in mind: Looks is very subjective.

[Ralphie]

The average American is still carrying over 10K in credit card debt.

The amount paid down last month was a drop in the bucket.

Americans are still overextended.

Buying a NEW car will help the car companies it won't help the consumer.

[Thomas Mac]

It was either Motor Trend or Car and Driver who also stated that the Chevrolet Malibu's interior was "dollar store quality". The Malibu is not in the same league as the Honda Accord. Only GM homers believe otherwise.

[Watchdog]

Glad to see the discussion of the quality of plastics is once again alive and well as we get set to roll into the new year.

My comment to all the "homers" out there: go buy what you want for whatever reason and stop yakking about this is better than that already.

[777]

I get very tired of the tit for tat, however I also hope that GM steals some talent from the likes of Honda or Audi. The lack of interior quality is the only thing that prevents me from buying GM! I think 2009 will be a good year for GM as they've finally learned their lessons!