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Published: Thursday, 12/11/2008

Midwest credit-union group pledges $10B for car loans


NEW YORK - A consortium of 1,200 credit unions in Ohio, Michigan, Indiana, and Illinois is pledging $10 billion in loans to car buyers and is teaming with General Motors Corp. to offer special discounts to boost sales.

The credit-union group said yesterday it will offer its members a "supplier discount" plus $250 off the price of GM vehicles.

A supplier discount is roughly 5 percent off the manufacturer's suggested retail price, said Mark LaNeve, GM vice president for North American sales.

It can be applied in addition to any other discounts and incentives.

The program runs through June 30 and, depending on the results, may be launched nationwide in early 2009, the credit union group said.

David Adams, chief executive of the Michigan Credit Union League, said that although the supplier discount is only for GM vehicles, the $10 billion the credit-union group is pledging can be used to finance a car purchase from any automaker.

Mr. Adams said financing rates from credit unions run about 1 percentage point less than rates from conventional banks.

Borrowers who want to buy a car now from the group's credit unions can expect rates between 4.5 and 5.5 percent, he said.

Mr. LaNeve said the credit union loans will not compete with loans offered by GM's finance arm, GMAC.

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