US Govt to dole out car loans?

With GMAC departing from the car loans market in both the US and Australia, one commentator has urged the government to step in.

Aparajita Saha-Bubna, a contributor to the Australian, has said that if GMAC were to be taken under the wing of the state, motorists may be able to benefit from increased car loans options.

Currently, GMAC – which is part-owned by General Motors – is experiencing a serious cashflow crisis and is expected to approach the US government with a proposal to turn the financier into a bank holding company, which would allow it to get its hands on a slice of the recent US bailout package.

However, Saha-Bubna claimed that by allowing the government to take up a major stake instead, GMAC would be able to take advantage of cheap federal loans, allowing it to reenter the car loans market and begin lending to motorists again.

If such a move goes ahead, it could in turn allow the Australian arm of GMAC to reopen its doors to new customers.

The group announced their departure from the Australian market last month citing severe cashflow problems.