Comments on: End of Days: GM vs. GMAC vs. Toyota

By: ttilley

ttilley — Thu, 16 Oct 2008 01:54:59 +0000

truthbetold37: My wife’s GM lease ran out and I had to replace her vehicle. Couldn’t lease through GMAC. Third party leases cost almost as much as buying. Ended up financing at our credit union at 4.5%APR.

Was it a GM car?

If it was then, at least in your case, this works for GM. If not, then not so much…

By: Campisi

Campisi — Wed, 15 Oct 2008 23:45:33 +0000

I’ve never bothered with financing a car before, but I was always under the assumption that it was smarter to get a loan through a bank or credit union anyway.

By: gamper

gamper — Wed, 15 Oct 2008 18:02:44 +0000

I dont claim to be following this side show circus that is GMAC very closely, but sounds like a game of brinksmanship. Cerberus is putting a gun to GM’s head so they will Merge with Chrysler or Buy back its share of GMAC. Either way, Cerberus gets rid of one of its toxic assets. Funneling new auto loans through other sources seems to be GM’s only way of fighting back, perhaps indirectly admitting that GMAC is now fodder for Bankruptcy lawyers and accountants.

By: kurtamaxxguy

kurtamaxxguy — Wed, 15 Oct 2008 15:28:55 +0000

“they can still finance vehicles through GM dealerships”

Sounds like a proposal for chaos, given dealers will probably have different senarios with their local banks, credit suppliers, etc.
Could some locales with bad credit environments not offer any financing at all?

By: motownr

motownr — Wed, 15 Oct 2008 14:40:33 +0000

AN also has a piece on how the captives are working to lay off their bad paper on the TARP (taxpayer).

Cerberus and GM may yet live to have the last laugh on this one.

By: KixStart

KixStart — Wed, 15 Oct 2008 14:34:41 +0000

Do you think these other lenders will finance 130% of the MSRP at 0% for 72 months on a new GM car for me?

By: Buickman

Buickman — Wed, 15 Oct 2008 14:32:28 +0000

GMAC was started by Billy, not Alfred.

By: jberger

jberger — Wed, 15 Oct 2008 14:14:05 +0000

So once again GM will compete against itself to make a sale with negative gross profit. I’m certain there is a clause in the agreement with Cerberus that prohibits this kind behavior with GM and GMAC.

How humorous would it be to see that clause trigger a forced rebuy of GMAC by GM?

By: rpol35

rpol35 — Wed, 15 Oct 2008 14:12:56 +0000

Actually, steering prospective buyers to outside financial sources is a good idea. It is referred to as indirect lending and the dealer usually gets a “finder” fee for sending qualified buyers to these lenders.

It would be possible for GM to try a universal lender for all GM dealers like a nationwide money center bank (think Bank of America or Citigroup) but it would make more sense to have the F&I guy (gal) at each dealership establish the relationship with a local lender. This way, the dealer gets the fee which is additional revenue that I am sure most of them could surely use.

As for GMAC, GM could end it and either sell the receiveable to raise cash, probably at a big discount unfortunately, or just let the loans pay themselves out and offer no more financing.

By: truthbetold37

truthbetold37 — Wed, 15 Oct 2008 14:11:01 +0000

My wife’s GM lease ran out and I had to replace her vehicle. Couldn’t lease through GMAC. Third party leases cost almost as much as buying. Ended up financing at our credit union at 4.5%APR.

By: Redbarchetta

Redbarchetta — Wed, 15 Oct 2008 13:59:29 +0000

The upcoming campaign puts GM in the position of steering dealer customers to financing channels other than its 49-percent owned GMAC affiliate.

Why would sending customers to other finance channels be any better? Correct me if I’m wrong but wasn’t GMAC giving out loans to just about anyone when other lenders wouldn’t. Did they some how flip flop now that the credit situation has gotten worse. The way I see it if they lost their captive finance arm to give out those “loans to anyone with a pulse” so they could keep their sales up, they are screwed. Why would someone else take on that risk, especially now.

Any GM dealers out their qualifying people with not so good credit through other lenders.

Robert can you explain how if GMAC goes belly-up it will bring down the whole GM ship. Wouldn’t that be like the Delphi bankruptcy, isn’t GMAC seperate but part owned by GM.

By: AGR

AGR — Wed, 15 Oct 2008 13:46:19 +0000

GMAC was invented by Alfred Sloan to assist GM to sell vehicles when banks and other financial institutions of the time were refusing to lend money for vehicle purchases.

Subsequently GMAC (captive finance controlled by the manufacturer) was emulated by every other manufacturer in North America.

Now there are manufacturers doing exactly what GM did years ago with GMAC, using “in house” financial services as a powerful “lever” to bolster marketing and increase sales.