GM and Chrysler may go for broke

Troubled auto giants GM and Chrysler may take a pre-arranged bankruptcy under the conditions of a government bailout loan, reports indicate.

According to discussions held by Bloomberg with sources close to the deal, the two companies would agree to the arrangement in a bid to prevent liquidation as investors jump ship.

The troubled carmakers are currently in negotiations with the US government to seal a US$60 billion ($92.8 billion) loan deal to prevent them from going under.

GM’s car loans arm GMAC has run into substantial difficulties in recent months, with the firm making a sharp exit from both the US and Australian car loan market.

Commenting on the departure, Australian money master Paul Clitheroe has said that many Australians could find themselves in a tight spot when looking for a competitive car loan.

In an article for thedaily.com.au, he advised that credit unions, banks and building societies may now be the best option for motorists.