When GM dealers heard that GMAC, the financing arm of General Motors, received $5 billion from the U.S. government last month as part of the $700 billion financial industry bailout, they thought the worst was over. Now dealers are complaining that the money hasn’t found its way to them or their customers.
GMAC has dropped its minimum credit score from 700 to 621, but dealers are saying that it isn’t enough. Too many potential buyers are being turned away due to more strict lending requirements.
According to Autoblog, GM dealers have made a list of requests. They want GMAC to start leasing again, approve sub-prime loans and cut interest rates on dealer purchases so that they can buy inventory. GM dealers have also complained that GMAC’s interest rates are usually higher than outside lenders.
The dealers are also complaining that more potential buyers are upside down on their trade-ins, and are being refused because GMAC now requires larger down payments than in the past.
This means that while there is financing available through GMAC, it might not be the best deal out there and you might not qualify. It is always in your best interest to shop around before deciding on a lender. In the current credit situation, this is more important than ever. Check out our Auto Loans 101 section for all our tips on getting the best deal possible on your new car loan.
We reported on another article a few weeks ago that said GM dealers were seeing increased showroom traffic and sales immediately after GMAC received the bailout funds and dropped the minimum credit score to 621. Is GMAC being too picky? Or are the dealers being silly by expecting the lending market to return to the way it was in 2007?