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Following both GMAC and GE Money pulling out of car dealership financing in December last year, the government will activate its Ozcar program from tomorrow (1 Sept).
The car dealer financing special purpose vehicle will provide "critical liquidity support" to car dealership financiers stung by the exit of the two US financiers.
The government said the announcement of OzCar provided "a much-need boost to confidence in the industry, allowing banks and other providers to step in and provide an alternative source of finance to the vast majority of former GE and GMAC customers".
It said activating the scheme was necessary so that the remaining GE and GMAC dealerships would have more time to secure ongoing financing.
GE Money and GMAC also quit the wholesale mortgage market due to funding issues.
OzCar will also provide Ford Credit Australia with access to the liquidity required to continue to support its dealerships - most of which are in regional areas.
All funds available in the special purpose vehicle have been provided by the major banks, with the Government providing support in the form of a guarantee.
Related stories:
GE Money fallout extends to car dealers - A spate of car dealerships are expected to hit the wall as a result of GE Money's decision to cease its motor finance business.
GE Money ditches third party mortgages - GE Money has announced it will cease offering home loans through third parties, including brokers and mortgage managers - except through up-for-sale franchise Wizard.
