According to an article in the Dallas Morning News, General Motors’ financing arm will temporarily waive some dealer fees and free-up $5 billion for loans to less credit-worthy applicants as it desperately tries to fight off bankruptcy.
The article said:
GMAC, which provides financing to both General Motors Corp. dealers and customers, is waiving through June the fee for posting aging vehicles on its online site. It is also allowing some dealers to postpone wholesale interest charges for two 30-day periods over the next four months.
At the same time, the company said it is setting aside $5 billion for consumer loans over the next 60 days and will resume lending to consumers with credit scores below 620. Muir said other factors, such as the applicant’s job and financial history, also will be taken into account in deciding whether to grant financing. GMAC also said it will cut certain rates for both new and used vehicle financing, but didn’t specify by how much.
Isn’t this part of the problem? Lending to individuals who are already having trouble paying bills (which has obviously resulted in a lower credit score) may just exacerbate GM’s troubles. Just yesterday we discussed the rise in delinquency rates for car loans and how that is pushing both automakers and consumers into bankruptcy. I don’t know if this is the best route to avoid bankruptcy, it may actually be the express lane to bankruptcy for GM.
Most analysts agree that job losses are only going to increase in the coming months, with that in mind it may not be wise for consumers to take on a new car loan. A sudden job loss can make it impossible for debtors to repay their car loans and force them into a repossession or bankruptcy. If you are a debt struggling to pay a new car loan because a recent job loss you may want to consider your bankruptcy options. Depending on your situation, you may be able to keep you car during a bankruptcy. Speak with a Dallas-Fort Worth bankruptcy attorney today to find out about your options.