| STORY HIGHLIGHTS |
- GM is desperate to sell cars without pricing them so low they're devalued in the eyes of consumers
- 0% interest rates on car loans help save consumers thousands without making GM's cars look cheap
|
GM Offering No Interest Car Loans During Bankruptcy
By Ross Edwards
Friday, Jun 26 2009 10:21
This is the best buyer’s market ever for a new car buyer. The unexpected drop in sales has made dealers and manufacturers desperate to sell vehicles and willing to offer great deals to do it. But, as AOL Autos points out, these companies have to walk a fine line between offering great deals to draw in buyers and devaluing their products by pricing them too low.
GM is doing this during its bankruptcy by offering a discount on its cars and coupling it with 0% interest on any car loan financed through its finance company. No interest auto loans are nothing new, but until recently, you had to make a choice between cash back incentives and 0% interest rate auto loans. Companies weren’t offering both. Also unavailable before was a long term 0% interest car loan. Now 48 and 60-month auto loans are available with 0% interest rates.
No interest car loans can save a new car buyer thousands over the life of the loan. A buyer with a $30,000 auto loan and a 6% interest rate would pay $4,800 more over 60 months than someone with a 0% interest rate. Because interest compounds, a 0% interest rate would save that buyer 16% of the cost of the car.
Confused or unsure about some of the car loan terms used in the article? Click here for our Auto Loan Glossary.
Comments
6 comments on this story so far.Try Americredit. They work primarily with consumers with not-so-perfect credit. Since your bankruptcy is already discharged, they will look at your application. You have to go through a dealer to get a loan from them, but many dealers have lenders that will approve someone with your situation. Ask first if the dealer has any sub-prime lenders they work with before you apply for a loan.
Check out their Web site (www.americredit.com) and you may want to check out a story we wrote about what they offer consumers for auto loans (http://www.autoloandaily.com/loan-news/featured-articles/1587-bad-credit-heres-what-to-expect-during-the-auto-loan-process). Usually, if your income is high enough to support a car loan payment and your debt is relatively low, a lender that specializes in sub-prime borrowers can help you. Good luck! Let us know if you need any more help.
No one will finance you if you are currently in bankruptcy as far as I know. If your bankruptcy has been discharged and finalized, there are lenders who will finance you, as long as you meet their other criteria. Income verification is big right now with them. Americredit is a lender that dealers use that finances those with not-so-great credit. They can probably help you, but not until your bankruptcy has been finalized. Let us know if you need any more help.
I would think that GMAC would approve you for an auto loan. You may want to try your local credit union or apply with Capital One online. See if you can get preapproved for the car loan first and then see if the dealer can beat it. You can always refinance the loan after about 6 months of on-time payments to try and get a lower interest rate. You can probably get an interest rate less than 10% with a FICO score of 677.
Just remember to do all your auto loan applications in the same week so your credit score doesn't take a hit.