General Motors has regained a financing arm, after making a move to acquire subprime lender AmeriCredit for an estimated $3.5 billion dollars. Before the government bailout, GM sold its stake in its in-house lender, GMAC, which became a separate company and recently changed its name to Ally Financial. While GMAC still provides financial services for GM and Chrysler, the company’s hesitancy in providing bad credit car loans is seen as a motivation for the move.
According to CNN Money, an attempt to rebuild its loan portfolio has meant that Ally has been cautious in offering bad credit car loans. But GM, looking to get back into the lending business, has decided to purchase AmeriCredit so that it may begin offering loans to buyers with bad credit histories.
Some believe that a lack of subprime lending has stalled GM and Chrysler’s recoveries. Financial lending can be profitable for dealers, and the fact that GM and Chrysler did not own their own lending arms is seen as a contributing factor into their lagging behind the recovery of Ford and Toyota, who do own their financial services departments.
Customers with bad credit now have another option when searching for a car loan. GM owns Chevrolet, Buick, Cadillac and GMC, so customers have a variety of options available in choosing a car.