You need a c-clamp (large enough to fit around the caliper) and block of wood (or a used brake pad). I always use the old brake pad. You will use these items to push the piston back into the caliper. Leave off the new brake pads at this point. Place the old brake pad (or wood) against the piston. Take the c-clamp and put one side (worm gear side) against the brake pad. The other end of the c-clamp goes against the caliper. Turn the c-clamp handle CW so that you are pushing the piston in until it bottoms out. Easier than it sounds. Once done, you can put the new pads in. You should now have more than enough room. They also have a tool at the parts store that will allow you to push the piston back in.
The GM factory manual states that you should compress the piston with an ordinary c-clamp. This is completely and totally incorrect on my 99 Aurora (and my 93 Saturn & 96 Taurus...). The rear caliper piston screws back in - very similar to older Subaru models (haven't owned one in a while). The piston face should have two triangular grooves that allow you to turn it. These grooves must align with the nub on the new inboard pad. Most parts stores will sell a universal kit that allows you to turn the piston back in using a wrench.
Using a c-clamp could damage the piston.
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