Unfortunately they panicked and overreacted. The result? Only the most well qualified buyers with stellar credit could get a loan. There were many people who could afford to pay car payments, but they couldn’t get financing at decent rates, so they didn’t buy a car. As buyers disappeared, car dealerships started offering spectacular incentives, including low and even zero interest rate loans. But those are only available to those same well qualified buyers.

The next problem in the downward spiral was about the stability of auto manufacturers who weren’t selling cars. What happens to your warranty if General Motors goes under?

On Monday, President Obama announced that the federal government would stand behind car warranties. That removes that hurdle.

Today GMAC announced that they will extend credit to car buyers with credit scores below 620. If you are one of the many people who could almost buy a car, now is your chance. GMAC has committed to making $5 billion available over the next 60 days.

Maybe this is the beginning of a recovery for the auto industry, or maybe we have a ways to go. Either way, if you’re planning to buy a car or truck any time soon, this is probably the right moment. You can even contact the Financing Department of your local GM Dealer by phone or email to see if you can get a loan on that car you’ve been thinking of.

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