Autoblog

After announcing earlier this week that GMAC would only finance customers who hold credit scores higher than 700, General Motors has decided it would be prudent to reassure consumers that they are still in the business of securing loans and selling vehicles. Starting Friday, GM will launch a "Financing That Fits" campaign on a national level. Through advertising on television, newspaper, radio, and the Internet, GM will promote dealer financing with GMAC Financial Services and, for the first time, with other lenders. To further restore consumer confidence, the ads are also designed to promote the experience and expertise of the dealership professionals who work in finance and insurance. The economy has taken a serious toll on GM's showroom traffic over the past few weeks, and the announcement Monday of stricter lending policies dried up business even further. The automaker is hopeful that its new ad campaign, and cash-back deals of up to $6,000 on every 2008 vehicle left in stock, will bring them back in.

[Source: Automotive News, subs. req'd]

This week, Detroit got its $25B bailout loan approved by Washington, and according to The Wall Street Journal, European carmakers are making like this is a game of "Simon Says." The Journal reports that Fiat has proposed the idea of hitting up the European Commission for €40 billion ($55B USD) to help the European auto industry make the move to cleaner, greener cars ahead of the strict new emissions regulations currently being bandied about. Like we said, this rationale is very similar to the one Motown used to get its money.

Fiat's grand idea was presented to other automakers at the ACEA meeting on Friday, and according to a spokesman for the automaker, "All European carmakers agree on the [€40 billion] demand." What a shocker. Said demand hasn't been formally made to EC bigwigs yet, but the lobbying is obviously well underway.

[Source: The Wall Street Journal]

Toyota Financial Services recently leaped over GMAC Financial services to take the lead as the biggest U.S. auto lender in terms of loan and lease contract volume. The study by AutoCount (a unit of the Experian Automotive company) estimates that Toyota captured 6.35% of the market from January through June, while GMAC had 6.2% for a close second place. Rounding out the top five were Chase Auto Finance, American Honda Finance, and Ford Credit (in that order).

As GMAC has made major cutbacks in leasing over the summer, many industry experts expect Toyota to hold its lead through the end of the year. A spokesperson from GMAC was quick to point out that the study did not include two wholly owned subsidiaries: Nuvel Credit and National Auto Finance. When those two companies are included, GMAC's share increases to 6.72 percent -- effectively placing them at the top again. While the automakers battle for the title position, the independent banks are the ones to watch. They've been steadily increasing their lending share as the Detroit 3 struggle with the rising costs of funds and declining credit ratings.

[Source: Automotive News, subs. req'd]

Findings from a recent study could potentially change the way banks pick interest rates for new car loans. The study, run by Penn State's Smeal College of Business professor Brent Ambrose, found the probability of car owners defaulting on their loans was actually affected by the make of the model.

Looking at the outcomes of 6,996 car loans between January 1998 and March 2003, researchers found that owners of European and Japanese brands were 50% and 56% respectively less likely to default on the their loans compared with owners who bought American. Basically, the eggheads are saying that loans for American brands should have higher interest rates than foreign brands to compensate for the higher default risk. Saturn was one of the worst performers in the survey, with the average owner of a Saturn 22 times as likely to default on a loan as a Toyota owner.

The research has the potential to see lenders judge loan costs by the make and model of a car, just as insurers do when calculating premiums. The news is sure to be a blow to the already struggling Detroit 3, but, we suspect any changes to lending criteria are still some way off.

[Source: Smeal College of Business via Wired]

There's few things that could make one turn away from the blue light at the end of the tunnel and return to the land of the living, but a ride in a Porsche Cayenne ambulance just might do the trick. Apparently Bulgaria agrees, as the cash-strapped country's health ministry is using a loan from the World Bank to buy a fleet 32 Cayenne's destined for ambulance duty (a Russian Porsche Cayenne police vehicle is shown above).

Unlike normal ambulances, the Cayennes will be used to reach remote rural areas where normal emergency response vehicles wouldn't dare travel. Is the buy legit or is the health ministry full of car nuts that want to do some high-performance off-roading on the weekends? Bulgarian Health Minister Radoslav Gaydarski says that Porsche offered the lowest bid to win the contract with his country. The natives, however, are peeved, as Bulgaria's healthy industry is in debt and faces a constant shortage of supplies and services. Considering the retail price of a Cayenne could pay for a few triple-bypass surgeries, Porsche must have cut one killer deal for the Bulgarian government on its über-utes.

[Source: Ananova via Caradisiac]

Ford announced today that it plans to acquire a financing package worth a heady $18 billion. The extra money will ensure that Ford survives the next couple of years while Alan Mulally and company attempt to turn the automaker around and bring profits back to the Blue Oval. Automotive News reports that Ford will spend $8 billion in cash by year's end, leaving it with $20 billion in the bank, so to speak. The new financing package that should be completed by December 31 will then boost Ford's liquidity to $38 billion. Ford says the added cushion will allow it to weather a recession or other unanticipated events that may come its way. Analysts note that while the automaker has bought itself a few years of secured operations, the mere fact the company went for the financing package means that it's going through money faster than originally anticipated, which is a bad sign. Either way, Ford will finish out the decade come hell or high water now, which is news we like to hear. With that monkey off its back, hopefully the automaker can now get down to the business of building better cars.

If you're interested in financial legalese, check out Ford's full press release after the jump.

[Source: Ford and Automotive News]