According to NADA more than 94% of all vehicle purchases last year involved some form of loan financing, so there are great opportunities for GM in this market. Initially GM considered the repurchase of GMAC its financial arm before the unfolding of the credit crisis. GMAC generated revenues of over $653 million in the first quarter of this year. In the end GM considered AmeriCredit which appears to have a stronger loan / credit division

The Marriage Between GM & AmeriCredit

The number of bad credit car loans such as bad sub-prime (credit rating below 650), sub-prime and non prime auto loans dropped about 6.3 percent in the first quarter, while encouragingly, prime and above prime or super prime car loan increase to 1.4 percent as compared to the same period of 2009. These are positive signs of improvement in the loan and credit aspect of the economy

Interest on new car loans was 4.7 percent as compared with an interest of 5.9 percent in the same time of 2009. This is so with new cars, as customers take advantage of zero percent loans that GM and other auto manufacturers are offers. However, with sup-prime or bad credit car loans, interest can go as much as 15 percent, generating serious income for GM and other auto markers with in-house financing capabilities

The deal to purchase AmeriCredit is worth $3.5 billion in cash and will be finalized in the fourth quarter of 2010

With sup-prime of bad credit car buyers an estimated 40 percent of the car buying market, GM foresees the great opportunity to captivate market share. GM is not the only auto maker that has taken note of the credit dynamics. Chrysler has created a relationship with Santander Bank USA to process loan for sub prime bad credit car buyers, stating that sub-prime buyers are about 20 percent of its market.

How to get an approval for a Bad Credit Auto Loan

To get an approval for bad credit car finance or auto loan can assist you in getting best possible rates on car loans. Pre-approval on auto loans can also provide you an overall edge while shopping for a car and it can also provide you with several other options as well. The experience of car shopping will surely be focused on how to get the best possible price on the new car instead of just getting upset about financing.

Why pre-approved auto loans are the best?

Some of the dealerships make you think that to get finance in spite of having bad credit is almost not possible. However, it is not so. If you research well you can find lots of better packages and offers provided by loan lenders to bad credit people in the market. One of the main reasons to get pre-approval on bad credit car finance is to get rid of the difficulty at the time of negotiating with the car dealer on the price of the car. By making down payment through a blank check you can easily purchase a car from any car dealer. Most of the car dealers usually wish to accept down payments for sealing the deal.

The Online Bad Credit Car Finance

Most of the car financing institutions has recently developed the online process which saves lots of money as well as time. When you enter all your financial and personal information online these loan lenders can limit the amount of personal requirement for processing the bad credit car finance. Consequently, you can even receive a check from the loan lender for purchasing a car in just one week’s time. At the same time you can also receive the loan contract. So, when you get ready to purchase the car, you just have to sign both the loan contract and the check.

What should the Credit Score be to get an approval for bad credit car finance?

If you have a credit score of above 680 points then you are a prime borrower who can avail lowest APR car finance from various loan lenders. In the same way, if you have a credit score below 680 points you are a sub-prime borrower who has to pay higher APR on his auto loan. Finally, if your credit score is below 550 points you will be qualified for a bad credit car loan financing