January 2, 2009 | In Business, Politics |
Just hours after receiving $5 billion in bailout funds from the U.S. government, General Motors’ financing division, GMAC Financial Services, announced a thoroughly unimpressive plan to “facilitate the purchase of cars and trucks in the U.S.” by easing its lending standards.
Rather than striving to cut costs and regain financial sustainability, North America’s biggest auto company will use its newfound taxpayer-funded slush fund to offer loans at below-market interest rates – as low as 0% in some cases. So even if you can’t afford a new car, GM will bend over backwards to make sure you get one…
It all sounds eerily similar to what subprime mortgage brokers were doing a few years ago. And once again, governments (both U.S. and Canadian) are pumping money into the system to encourage it.
