GMAC's just put out the following press release letting 'mericans know it's back to the free-wheelin' spending-without-saving days of 2007, as they've expanded retail auto financing to customers with a 621 FICO score or above. That's a decent-sized expansion from the change to requiring a 700 FICO score or higher just two months ago. Dealers across the nation are expected to be rejoicing throughout the day. All this is thanks to the decision by the Feds to release $6 billion from the TARP fund to GMAC to shore up their books. Full press release from GMAC below:
GMAC to Expand Retail Auto Financing: Customers to benefit from greater access to low cost funding
DETROIT, Dec. 30 / — GMAC Financial Services will immediately resume auto financing for a broader spectrum of U.S. customers as a result of expanded access to funding as a bank holding company. The company will modify its credit criteria to include retail financing for customers with a credit bureau score of 621 or above, a significant expansion of credit compared to the 700 minimum score put in place two months ago.
GMAC's application to become a bank holding company was approved by the Federal Reserve Board of Governors on Dec. 24, 2008. The company also announced that it received an investment from the U.S. Treasury Department as part of the Troubled Assets Relief Program.
"The actions of the federal government to support GMAC are having an immediate and meaningful effect on our ability to provide credit to automotive customers," said GMAC President Bill Muir. "We will continue to employ responsible credit standards, but will be able to relax the constraints we put in place a few months ago due to the credit crisis. We will immediately put our renewed access to capital to use to facilitate the purchase of cars and trucks in the U.S."
At this time, GMAC will not finance higher risk transactions characterized by a credit bureau score of 620 or below. The company will utilize both GMAC Bank and funding from other sources to resume its traditional spectrum of prime-based credit, appropriately pricing for risk and requiring down payments where necessary.
"The majority of GMAC's auto financing has been in the prime arena," Muir said. "Therefore, opening access to credit for those with CB scores of 621 or better will allow us to return to more normal levels of financing volume, and should help in efforts to stabilize the U.S. auto industry."
GMAC's expanded financing policy and improved retail financing rates will apply to both new and certified used vehicles. Dealer wholesale financing remains a priority for GMAC, and is unchanged.
About GMAC Financial Services
GMAC Financial Services is a global finance company operating in and servicing North America, South America, Europe and Asia-Pacific. GMAC specializes in automotive finance, real estate finance, insurance, commercial finance and online banking. As of Dec. 31, 2007, the organization had $248 billion in assets and serviced 15 million customers. Visit the GMAC media site at http://media.gmacfs.com/ for more information.
SOURCE: GMAC Financial Services