GM and GMAC ease lending rules to entice car buyers

By Jonathan Stempel and Kevin Krolicki

NEW YORK/DETROIT (Reuters) - General Motors Corp and its GMAC funding affiliate launched programs on Tuesday to lure U.S. car and truck buyers back into showrooms, as the nation's largest automaker tries to revive its sagging fortunes.

GMAC modified its credit criteria so that it could lend to a wider range of potential customers, two-and-a-half months after significantly curbing lending.

Meanwhile, GM is offering zero-percent financing on several vehicles, and rates no higher than 5.9 percent on more than three dozen 2008 and 2009 models. The offer expires on January 5. Many eligible vehicles also carry cash discounts of $500 (347 pound) to $4,250 (2,948 pound).

The changes came a day after the U.S. Treasury Department agreed to take a $5 billion (3.5 billion pound) stake in GMAC, and lend GM as much as $1 billion to support GMAC, in an effort to help ensure that both survive.

"The bottom line is much better access to funding," said Mark LaNeve, GM's vice president for North American sales, on a conference call with reporters.

GMAC will now extend loans to retail customers with credit scores of 621 or higher, eliminating a restriction that required a score of 700.

Many analysts consider borrowers with a credit score of 620 or lower to be "subprime." The median U.S. credit score is 723, according to Fair Isaac Corp's myFICO unit.

GMAC has traditionally provided the bulk of financing for GM retail customers, and also financing that dealers rely on to carry vehicle inventory.