(snip)DETROIT | General Motors Co. will buy AmeriCredit Corp. for $3.5 billion, a deal that allows the automaker to expand loans to customers with poor credit and offer more leases.
Those are key areas where GM must accelerate sales.
Company executives hope the acquisition will raise the carmaker’s value ahead of a coming public stock offering. The government bailed out GM last year, and the IPO will help it get rid of part of its 61 percent ownership stake.
The transaction will give GM an in-house financing arm for the first time since it sold control of GMAC Financial Services in 2006.
“Our dealers have been telling us that not having an in-house finance arm hurt our ability to finance certain loans and leases,” said Edward E. Whitacre Jr., GM’s chief executive. “It hurt our ability to meet rising customer demand for GM cars and trucks. Now we’re going to fix that.”"(snip)
(snip)"GM says that its partner, Ally Financial — formerly known as GMAC — will continue to finance GM’s dealer inventory and make loans to buyers with good credit. GM sold controlling interest in GMAC in 2006"(snip)
(snip)"Only 4 percent of GM’s sales come from subprime buyers, those with credit scores below 620 on a 300-to-850-point scale, but about 40 percent of U.S. customers have below prime credit scores.
Jesse Toprak, the vice president for industry trends at TrueCar.com, said GM’s sales could jump as much as 20 percent if it aggressively courts subprime buyers."(snip)
You can't make this s#!t up, folks !
Indeed, there is no doubt that GM dealers are experiencing rising 'demand' from potential customers with low credit scores. These potential customers undoubtedly want / need new cars, but have been turned away by other dealerships due to one small detail ... their ability to come up with heavy down payment money ( in the absence of a 'cash for clunkers' US taxpayer handout ) and/or their ability to actually repay an auto loan on time is very doubtful !!! But hey, no problem, we'll find a different way to let US taxpayers ( i.e. the 61% owners of GM ) subsidize the sale of new cars to people who can't afford them ... simply start writing low down payment high interest rate subprime loans to enable the initial sales, and let the future loan losses ( and US taxpayer losses / bailouts ) fall where they may !!!



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