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Ford Credit Sets Minimum for Floorplans

December 23, 2008

Ford Credit put a 4 percent minimum interest rate on credit dealers for inventory financing, reported Automotive News.

A Ford Credit spokeswoman said the company will calculate dealer floorplan rates using 4 percent instead of prime whenever the prime rate falls below 4 percent.

The prime rate fell from 4 percent to 3.25 percent last week after the Federal Reserve cut lending rates. The move follows a similar one taken by GMAC.

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Federal Reserve Approves NADA-Backed Initiative Aimed at Increasing Inventory

Following President Bush's announcement Friday to provide $17.4 billion in bridge loans to General Motors and Chrysler, the Federal Reserve Board, in a related action, addressed a key request from the National Automobile Dealers Association by including floorplan securitizations in a new $200 billion credit facility the Federal Reserve is establishing.