DETROIT — GMAC reached out a helping hand to dealers yesterday by announcing that the company is now offering approvals in the subprime tiers for qualified buyers, in addition to earmarking $5 billion for auto loans and temporarily easing wholesale finance charges.

Much of this initiative extends to the used-vehicle marketplace, noted Michael Stoller, a spokesperson for the company.

Part of the company's program includes accepting auto finance applications for qualified customers who have FICO scores below 620.

However, Stoller told SubPrime Auto Finance News Wednesday, "From our perspective, the flexibility and expansion into the credit tiers below 620 is symbolic of where we were (prior to the retraction)."

He went on to indicate this is just one small piece of the puzzle that GMAC is providing to dealers to help them improve business and move vehicles. Traditionally, subprime loans make up only a small percentage of the company's portfolio and he said this will continue to be the case.

Meanwhile, by setting aside $5 billion for auto loans, Stoller said the company's goal is to reassure the public that there is money to lend.

Further offering insight, Bill Muir, GMAC president, said, "Dealers have told us that cash flow is critical right now. We want to do everything possible to help dealers sell their inventory of cars and trucks, while preserving their working capital during the next couple of months."

Effective immediately, GMAC said it is:

—Eliminating all dealer curtailment payments for aged inventory during April.

—Waiving the fee for dealers to post aged units on SmartAuction through June to reduce inventory and minimize future curtailment charges.

—Allowing qualified dealers the option to defer wholesale-interest charges for two 30-day periods over the next 120 days. The deferment can be used beginning with March billing. Payment for the deferral period will be due 90 days following the deferred month.

Discussing these moves, Muir pointed out, "The option to defer wholesale interest payments alone can be a significant temporary boost to cash flow for most dealers. Our goal is to ease the burden on dealers over the next few months as they work hard to lower costs, reduce inventory and protect their financial stability."

Moreover the company said it is offering certain rate reductions for new- and used-vehicle financing, along with ramping up allowable advance rates for financing terms of 60 months or less.

"GMAC now finances a broad spectrum of auto buyers, similar to traditional levels," Muir said. "Through March, we financed over $2 billion in new- and used-retail auto contracts. Over the next 60 days, GMAC will make available at least $5 billion in order to increase the flow of credit to U.S. automotive customers."

"GMAC has funding available to stimulate auto sales. We want to do our part to support both the U.S. auto industry and individuals in the market for a car or truck," he added.

Stoller explained that the company is drawing upon its relationships with other banks and funding facilities for this initiative to help dealers. With sales slowing and volume down, he said the company "has some room" to utilize its whole-loan agreements and existing credit facilities to benefit sales and dealers.

While becoming a bank holding company is a "long-term positive" for GMAC, this move did not play a big role in the decision to extend the credit spectrum and offer assistance for dealers, Stoller noted.