GMAC, the main source of auto loans for General Motors (GM), was recently approved as a bank holding company allowing them to access funds from the Federal government. Within days after the approval, taxpayers provided the lender with $6 billion of funds through the TARP in an effort to help stimulate auto sales. That could be helpful as during November sales were down a whopping 37%. What’s more, as record layoffs persist, vehicle sales are not seeing any chance of returning to normal levels anytime soon.
You would think that the record number of auto loan defaults and delinquencies seen during 2008 that GMAC would look to a conservative approach when lending this money in a time of great economic distress. But, NOOOOOOOOOO. Instead they believe they have to relax lending standards and provide ridiculously low interest rates that they will assuredly have them lose on every deal. Here is how they are about to spend your money…
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