Thread: GM, Chrylser, Credit Unions Expand Loan Programs

Wasn't this the way the subprime housing lending "bubble" began - by lending money to people who were not in a position to repay it?

GM, Chrysler, Credit Unions Expand Loan Programs
Wednesday, January 7, 2009 5:00 PM

NEW YORK -- Automakers General Motors Corp. and Chrysler LLC, along with a group of credit unions, said Wednesday that they are expanding to all 50 states programs that offer low-cost loans and special pricing incentives to credit union members.

David Adams, president and chief executive of the Michigan Credit Union League and the national credit union group CUcorp, said the expansion of the "Invest in America" program is expected to give 90 million members of nearly 8,000 credit unions potential access to low-interest loans for GM and Chrysler vehicles.

Adams said that while there aren't any specific numbers yet, in the weeks since the original program began its Web site has received over 1.3 million hits and some of the larger credit unions in the affected states have reported increases in auto lending of 20 percent to 80 percent on an annualized basis.

Automakers and dealers have blamed last year's steep drop in sales partly on a lack of affordable financing for potential car buyers, which has compounded already weak consumer spending stemming from worries about job security and a weak overall economy.

With the expansion of the program, over $80 billion in credit is now available for auto loans through credit unions across the country, enough to finance the purchases of about 4 million vehicles, Adams said.

"I think it's safe to say that there's no better solution for the troubles that are facing the auto industry," Adams said.

Adams said his group also has been in "positive talks" with Ford Motor Co. about starting a similar program, but doesn't have anything to announce yet.

The program started in December as an deal between Detroit-based GM and about 1,200 credit unions in Michigan, Indiana, Illinois and Ohio. The credit unions in those states set aside $10 billion to finance auto purchases and partnered with GM to offer their members a "supplier discount" plus $250 off the purchase price of GM vehicles.

A supplier discount is about 5 percent off the manufacturer's suggested retail price of a vehicle and is in addition to any other discounts and incentives already offered.

Jim Bunnell, executive director of channel marketing for GM, said the automaker has been pleased with the response from its original program, noting that 30 percent of the people who requested an authorization code for the program ended up buying a new GM vehicle.

"We also got a lot of calls from our dealers, so it was an absolute natural for us to open this up to all 50 states," Bunnell said.

GM posted an overall sales drop of 31 percent for the month.

A week after GM's original announcement, a group of credit unions in the Midwest and South pledged another $12 billion in low-cost auto loans for member purchases of vehicles from Auburn Hills, Mich.-based Chrysler.

Chrysler offered members of the 2,500 credit unions in those 12 states rebates of $500 or $1,000 on nearly all Chrysler, Jeep and Dodge vehicles financed through the credit unions.

Ed Broadbear, Chrysler's director of incentives and programs, said the states involved in Chrysler's original program saw a "significant sales lift" compared with rest of the country in December. Overall, Chrysler posted a 53 percent drop for the month.

GM's expansion of the offers to all 50 states expires at the end of March, while its original agreement with credit unions in the four states runs until June 30. Both Chrysler's original and expanded programs run through June 30.

© 2009 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

http://www.newsmax.com/us/automakers_cr ... 68831.html

I wonder how many illegal aliens will take advantage of this program along with the "Bank On Mexifornia" Ponzi scheme who defaulted on previous loans like the 5 million HUD estimates defaulted on their sub prime mortgages........

Its leading to this!



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