Car shoppers who have struggled to buy a new General Motors vehicle might want to head back to a GM dealership.
GM’s acquisition in July of AmeriCredit to be GM’s in-house lender makes it possible again for the automaker to handle all customers, GM spokesperson Reneé Rashid-Merem says.
GM sold control of its former in-house financing company, GMAC, in 2006. The lack of an in-house lender since then cut into sales, Rashid-Merem says, because it hampered the automaker’s ability to work directly with consumers. GM worked with outside lenders, such as US Bank, on some transactions, but Rashid-Merem says consumers who had credit scores that were lower than 700 (known as subprime borrowers) typically found it difficult to buy or lease a new vehicle because of increased lending scrutiny by banks.
AmeriCredit is known for helping subprime borrowers, but Rashid-Merem says GM will require employment histories and proof of income from potential borrowers to ensure that loans will be repaid.
Improper scrutiny led to GM’s financial meltdown and eventual bankruptcy, says Dana Johnson, who is chief economist for Comerica Bank.