An immediate benefit to US dealers is the unveiling of 5-year, 0 per cent finance deals for new car buyers. This, it is hoped, will help clear huge stocks of unsold motors.
The money joins $6 billion recently lent to GM’s financing division, GMAC. Since then, GM has eased its loan criteria for car buyers, meaning dealers find it easier to source money for more types of customer.
In response to sales being cut in half last month, Chrysler’s chief said up to 25 per cent of this fall could be attributed to buyers not being able to get car loans.
Both bailouts are in addition to the $17.4 billion loan to Chrysler and GM, which was to see the Big Two car makers through until March. By then, the two will have to submit restructuring plans to the Government.
If the US administration does not agree with them, it will consider other measures – including, say some analysts, bankruptcy.
Ford, which did not seek any Government aid in 2008, is also said to be discussing help for its credit division.
The car maker reaffirmed it was not seeking short-term aid, though – rather, it is collaborating on ‘ideas’ to aid recovery in the market.