GM To Acquire Auto Financing Company

General Motors Thursday said it will acquire auto financing company AmeriCredit Corp. so it can increase leasing and make more loans to buyers with low credit scores.

The Detroit automaker says it will pay $3.5 billion to buy all of AmeriCredit's stock at $24.50 per share - a 24 percent premium over Wednesday's close.

It expects the deal to close in the fourth quarter.

GM CEO Ed Whitacre said Thursday the deal will make GM more competitive in auto financing.

"This acquisition supports our efforts to design, build and sell the world's best vehicles by expanding the financing options we can offer to consumers who want to buy GM vehicles," said Whitacre in a statement. "Adding AmeriCredit to our team will improve our competitiveness in auto financing offerings, and I am very pleased to have them on board."

GM executives have said their sales have been hurt by a lack of subprime and lease financing.

The company says that Ally Financial - formerly known as GMAC - will continue to finance GM's dealer inventory and make loans to buyers with good credit.

GM says it is not considering a purchase of Ally's auto financing unit.

© MMX WWJ Radio, All Rights Reserved. The Associated Press contributed to his report.