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GM offers 0 pct financing in big sales push

General Motors Corp. said Tuesday it will offer financing as low as zero percent over the next week for several 2008 and 2009 models as the automaker makes a big year-end sales push.
The news comes after its financing arm, GMAC Financial Services LLC, agreed to take a $5 billion bailout package from the Treasury Department. Mark LaNeve, GM's vice president for GM North America vehicle sales, service and marketing, said GMAC's approval to become a bank holding company and subsequently qualify for the Treasury funding were crucial steps to affording the new financing offers.
"I think it would be fair to say that without this change in structure to GMAC to becoming a bank holding company, we would not be able to do this today," LaNeve said in a conference call.
GM said it will offer zero-percent financing for up to 60 months on the 2008 Chevrolet TrailBlazer, GMC Envoy and Saab 9-7X sport utility vehicles through GMAC. The Saab 9-3 and 9-5 sedans also qualify for zero-percent financing.
The carmaker is also offering financing between 0.9 percent and 5.9 percent on more than three dozen other 2008 and 2009 models, including many trucks and SUVs. The deal runs through Jan. 5.
Many of the qualifying vehicles have seen big year-over-year sales declines that the automaker is eager to move out of dealerships. TrailBlazer sales are down 42 percent through November compared with the same period last year. Envoy sales are off 49 percent.
The incentives come on top of numerous other deals offered by GM, which is struggling to boost sales and keep itself afloat into the Obama administration.
Previously, GMAC was unable to offer such low rates to consumers because GMAC's lack of funds, GM spokesman John McDonald said.
"Essentially, we couldn't even activate our finance company as an ally in trying to get deals done in the market," LaNeve told reporters. "I think what we're seeing today is a big improvement over that."
Separately, GMAC said Tuesday that it will resume offering automotive financing to customers with lower credit scores, eliminating restrictions put in place two months ago that mandated a minimum score of 700. (Credit scores range between 300 and 850).
LaNeve said the previous restriction had sent a message to customers that GMAC was no longer in the financing business and added that the combination of lower credit qualifications and lower-cost loans should change that perception for consumers.
"It will certainly signal that GMAC ... is back in the game of financing vehicles," he said.
GM, along with Chrysler LLC, themselves received approval from the Bush administration for $17.4 billion in aid from the Treasury Department's TARP program. The loans require that the automakers submit a plan for viability by March 31.

Updated : 2021-05-18 23:38 GMT+08:00