• Apr 2, 2009
GMAC has loosened the purse strings, with General Motors' finance arm allocating $6 billion for auto loans for the next 60 days. The 60 day mark is critical to GM, as it is the government's drop-dead date to satisfy Auto Task Force viability requirements. The cash infusion will help struggling dealers with dried up credit channels, but it will also be used to finance cars and trucks to people with credit scores under 620. The under 620 crowd is referred to as subprime, a term that is now synonymous with the words "bailout" and "recession."

Back in October, GMAC restricted lending to customers with scores over 700, and when the U.S. government provided a $6 billion in loans, the minimum score was lowered to 620. GMAC insists that the under 620 score would be approved sparingly, and buyers would still be required to qualify for financing. NADA chairman John McEleney says that the lowered credit score minimum could result in the ability to help 30-35% more Americans get into a new car or truck. And while overplaying the subprime card can lead to more trouble, at this point, the General clearly has to do something to get metal moving again.

[Source: Automotive News subs req'd | Image: Joe Raedle/Getty]


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  • 40 Comments
      • 5 Years Ago
      Is 620 really that low?
        • 5 Years Ago
        I hear when you hit 420, it gets better.
      • 5 Years Ago
      620 is not "abysmal" at all.

      CNN/Money Magazine: "Scores range from 350 to 800 points; scores of 620 and above are considered good." ("Money Magazine Editor-at-Large Jean Chatzky appears regularly on NBC's Today.")
      • 5 Years Ago
      I thought GMAC was more owned by Cerberus than GM now?
        • 5 Years Ago
        Really? I thought that was Chrysler?
      • 5 Years Ago
      This just shows how disorganized GM is because the right hand really doesn't know what the left hand has already said; that GM will not support Saab after Dec. 31, 2009 and yet they have the Saab convertible in the picture. You would think that they would have used one of their core Brands; Cadillac, Chevy or Buick which will continue after GM's bankruptcy

      Maybe they donot have a better example than a Saab to be included in the Add. To bad they could not support Saab for the last 10 years, but that is GM.
      • 5 Years Ago
      This looks like it is going in circles faster and faster.


      Like swirling the drain.
      • 5 Years Ago
      here we go again.
      • 5 Years Ago
      Wobbly_ears said

      "Pay your debts down, live frugally & when you're on a good financial standing & have saved up money, THEN think about buying a new car."

      But . . . but . . . that would require patience and rational thinking : )
      • 5 Years Ago
      This is why you let companies fail instead of propping them up. G.M. is too far gone and with current economic climate there's no way for them to recover. Yes it will suck in the short term; but other companies will eventually fill the void.
        • 5 Years Ago
        Amen nrdeitrich!

        ...it looks like the majority of commenter's understand the idiocy of this...and yet we still have to support them for another 60 days!!?

        all i can say is this is a major BUMMER! Its just stupid
      • 5 Years Ago
      That customer, and the salesman for that matter, have sub-prime written all over them.
      • 5 Years Ago
      Haven't these financial geniuses learnt ANYTHING?? These subprime borrowers have a low rating for a reason. If your score is in subprime range, get a USED car, make more money & get your score up. Pay your debts down, live frugally & when you're on a good financial standing & have saved up money, THEN think about buying a new car. For the moment, you can drive a used beater & still be able to drive.

      And to think that GMAC just got money from taxpayers & are again playing the very same games.

      Cerebreus (GMAC's greedy owners) should be charged with misappropriation of public money.

      I am STEAMING right now with anger. Are the citizens & government blind??
        • 5 Years Ago
        You CAN loan to people with bad credit responsibly. you just require a MUCH higher % down payment, make sure they have adequate collateral and have higher interest rates.

        the subprime loans that got the whole market in a tailspin were ridiculous. they were giving home loans to people with bad credit and requiring 0%, 1% or 5% down! that's just stupid and there is no indication that GMAC is trying to replicate this.
        • 5 Years Ago
        You are partly correct but also partly wrong. I guess you havent heard abt the collapse of the housing market? There are millions of people who got severely affected by the nightmare of the housing crisis. More than half of those were not irresponsible. Can you justify paying $3k mortgage when ur neighbor who just baught their house is paying $1500? Alot of those went to foreclosure as a way to escape the bust of the housing market, BUT, they are not irresponsible creditors. I am talking by experience. You people are sometimes so cold and clueless. There are alot of people who can afford to pay for a new car but they are not given the chance because their credit was ruined by the foreclosure. And i am sure that if not for the housing market gone really bad these people would still have better FICO score than you.
        • 5 Years Ago
        There are 3 kinds of people who might have a sub prime rate.

        1. Youg people who haven't had a credit history long.
        2. People with too much debt.
        3. People with poor credit record. (Bankruptcy etc.)

        None of these people need to take on an additional debt of 15-20k. One can find a reliable car for 3k-5k easily. The excuse that everyone needs a brand spanking new car is ridiculous. People with such low credit score need to sacrifice pride & live frugally & try to pay off all their obligations responsibly. Taking on an additional debt is inexcusable, if you ask me.

        As for GMAC, I think this is criminal & unethical. I wouldn't have cared if they hadn't come begging to the taxpayer for their shoddy & greedy decision making.

        Do Americans have really that little short memory??
        • 5 Years Ago
        Tony,

        So, the fact that your neighbor pays 1500 while you pay 3000 makes you want to put your home on foreclosure?? And that doesn't make you a risky borrower? What is the guarantee that you won't abandon your car when you find out that your coworker pays $100 less than you? When you take a credit, you have an obligation to fulfil your part of the bargain - you pay down your debt.

        As for housing crisis: People who bought more house than they could afford or who signed onto ARM blindly get no sympathy from me. Now, if they lost their homes because of unemployment, can't they buy a cheaper car rather than buying 2-25k car on debt?

        And you're accusing me of being cold?? Sir, I have a credit score of 800+ but I rent an apartment! My wife & I don't live on credit cards & we save ferociously. Consequently, we don't have 65" HDTV or have taken expensive vacations. We have been responsible with our finances but we're being asked to pay for the mistakes of others.

        • 5 Years Ago
        Wobbly_ears said

        "Pay your debts down, live frugally & when you're on a good financial standing & have saved up money, THEN think about buying a new car."

        But . . . but . . . that would require patience and rational thinking : )
      • 5 Years Ago
      Nothing has changed. Same GM, same quality issues.
        • 5 Years Ago
        I doubt he does. All he does is troll Engadget and talk about how much Microsoft sucks and how great Apple is. Its funny that he comes here and thinks he knows about cars. Whats even more funny is he has a similar vendetta against GM as he does with Microsoft.
        • 5 Years Ago
        What, quality issues, Jubei? They're no worse than any other car company out there, domestic or foreign.

        You really do need to stay out of Autoblog. We have enough trolls here as it is.
      • 5 Years Ago
      Guys...that pic needs a caption contest.
        • 5 Years Ago
        *New Jersey accent* "What do I gotta do to get you to buy this car today?"
        • 5 Years Ago
        You sure would look good driving to your bankruptcy hearing in a yellow Saab convertible.
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