The Treasurer has announced a Special Purpose Vehicle (SPV) will be established with the support of leading Australian banks to provide liquidity to car dealer financiers who have encountered financing difficulties as a result of the global financial crisis.

UPDATE 19 December: Information Guide for Car Dealers on the Special Purpose Vehicle facility.

The SPV will be implemented by 1 January 2009.The overall size of the SPV will be around $2 billion.

The Government will provide support to the SPV in the form of a guarantee expected to cover a minor proportion of the securities issued.The SPV will operate with Government support, refinancing dealerships for a period of 12 months, after which its funding level will run down.

The financing that will be available under the SPV will be for wholesale floorplan financing only. Retail financing will continue to be available through banks, building societies, credit unions and finance companies.