GM sets new zero per cent financing after rescue

CHICAGO: General Motors announced plans on Tuesday for zero per cent financing on many new vehicles in an effort to jump-start weak sales a day after a government rescue for financing arm GMAC.

"We're very excited to offer this reduced rate financing through GMAC to encourage our customers to get back into the game," said Mark LaNeve, vice president at GM North America.

Loans at zero per cent would be offered for up to 60 months for many cars, with other loans ranging from 0.9 per cent to 5.9 per cent, GM said.

The move came after the US Treasury announced late Monday a rescue of six billion dollars for GMAC, the longtime finance arm of GM.

GMAC, which is owned by Chrysler parent Cerberus along with GM, will get a government capital injection of five billion dollars. GM will get a loan of one billion dollars to participate in the reorganization of GMAC as a bank holding company.

GMAC said separately it was loosening credit terms, which had been tightened earlier this year to allow lending only to the most creditworthy customers.