US car finance arm extended lifeline

Fri, 22 May 2009



The US Treasury announced last night that the US car finance company GMAC has been given a further cash injection of $7.5 billion to allow it to continue lending to customers and dealers .

From here on in, according to reports, the treasury will hold a 35.4% stake in GMAC. The car finance provider is the finance arm of massive carmaker General Motors. The second round of investment tops up an earlier $5 billion injection of cash.

GMAC has an upgraded level of access to credit lines due to its size and involvement in the functioning of the entire US car industry . The loan will allow the company to continue lending to dealers and consumers, and start meeting its own capital requirements.

The aim of the cash injection is to stabilise the car finance market, and aid in the overall recovery of the economy.
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