An American car manufacturer has raised a $300m fund to provide financing for its new-car purchase program, with the aim of attracting more Americans to buy their new-cars.
The Federal Motor Carrier Safety Administration announced the funding, which comes on top of a $50m loan secured by the firm last year, to provide loans of up to $100m to vehicle buyers to help pay down debt.
The new fund will go towards buying new vehicles for the company’s new vehicle buying program, called the Advanced Vehicle Financing Program (AVF), which aims to help Americans save more money on car loans and reduce their car debt by up to 20%.
The company said the fund will cover financing costs associated with new vehicles from a range of automakers including Toyota, General Motors, Honda and Ford.
It also plans to cover vehicle sales and incentives from its existing vehicle financing programs, which includes a $1m credit from General Motors and $3m from Ford.
The company has been trying to build the fund, which it is calling the Advanced Auto Financing Fund, which aims at providing loans of as much as $100million.
In November, the company said it would launch its own vehicle financing program.
“We believe that the new AVF is an important first step toward providing affordable car financing for the new-vehicle buying program,” said Brian Smith, the president of Advanced Auto Finance.
Ford and General Motors have launched similar programs, but have been reluctant to go public with them, saying it would make the program difficult to sell to consumers.
The financing program was launched by Ford in late 2013, but has faced criticism from some car buyers for not making it easy to use.
Ford, however, said the new fund was designed to help people who had fallen behind on car payments and were seeking alternative financing options.
The fund also aims to create an incentive program for those who buy new vehicles through their leasing agreements.
As a result, the fund is likely to provide a small, temporary boost to the company.
Toyota said it plans to expand its car leasing program, the Vehicle Fleet Financing (VFW), which has been in operation since 2009.
The VFW program offers car owners incentives to buy new or used cars from dealerships, and offers cash incentives to lease vehicles.
More:Ford’s new car buying program is expected to raise about $2.5bn over the next five years.
It has been the largest-ever vehicle financing plan for a major American automaker, with about $1.6bn pledged in funding last year.