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GM To Offer 0%, 60 Month Financing
 Bloomberg TV is reporting that GM is going to offer 0% financing for 60 months to stimulate auto sales. General Motors' car loan division GMAC Financial Services recently received a $6 billion injection from the Fed which would enable them to make the 0% financing loans.
The rescue package has two parts. The Treasury Department is injecting $5 billion directly into GMAC in exchange for preferred equity shares that pay an 8% dividend. GMAC also is issuing warrants to Treasury in the form of preferred stock. If exercised, the warrants will pay a 9% dividend.
Also, the government will lend $1 billion to GM that the automaker will invest in its financing arm. GMAC needs the funding to convert to a bank holding company, a necessary step to receiving the bailout money.
GM reportedly had some similar offers in 2006 but not on all cars. We will post more details when we learn more.
Update: Marketwatch says GM's financing offer will be on select cars and available to qualified buyers until January 5th.
GM said Tuesday that it will provide reduced-rate financing as low as 0% APR for up to 60 months on certain new cars and trucks. The auto maker said the offer is available to qualified buyers today through Jan. 5.
Posted on December 30, 2008
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