UPDATE: GMAC Defends Dealer Cull
GMAC is facing mounting criticism (lawsuits to follow) for suckling on Uncle Sam’s teat for $6B, then turning around and cutting car dealers off at the knees. And so, on the same day TTAC takes GMAC to task for doing the dirty on dealers, on the same day ChryCo CEO Bob “The Prowler” Nardelli is out and about, sniffing around the federal trough for even more bailout bucks for Chrysler’s former captive lender, GMAC has issued a press release defending its “death to dealers” policy. I mean, newfound financial probity. Color me unconvinced. As one of our Best and Brightest pointed out, where there’s smoke, there’s mirrors. (Grammarian mulligan evoked.)
Wholesale Financing
* GMAC is currently doing everything it can to provide broad-based funding support to auto dealerships during these very difficult times. For example, despite the tight credit markets, GMAC continues to provide wholesale financing for about 75 percent of GM auto dealers – a level consistent with the past five years.
Dealership Default
* The stresses facing some automotive dealers today are the result of the U.S. economy in recession, a weakened auto industry, and inadequate sales for some dealers to meet expenses and manage debt.
GMAC Curtailment Policy
* Wholesale financing is a revolving credit line secured by individual vehicles. As vehicles age, their value decreases and the loan risk increases. Requiring a portion of the loan to be repaid after a period of time – known as a curtailment – is not new for GMAC and is standard practice for any collateral-based lender.
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- JLGOLDEN Our family bought a 2012 Murano AWD new, and enjoyed it for 280K before we sold it last month. CVT began slipping at 230K but it was worth fixing a clean, well-cared for car. As soon as we sold the 2012, I grabbed a new 2024 Murano before the body style and powertrain changes for 2025, and (as rumored) goes to 4-cyl turbo. Sure, the current Murano feels old-school, with interior switchgear and finishes akin to a 2010 Infiniti. That's not a bad thing! Feels solid, V6 sounds awesome, and the whole platform has been around long enough that future parts & service wont be an issue.
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@andrew: " feeling the warm, musky scent of a F&I guy breathing sweet nothings down my neck whilst he feels up my wallet from behind..." Awaiting your first full-length TTAC editorial. Dang, boy, you can write!
What can GMAC do? It doesn't matter who it is, the lenders aren't buying the cars, the consumers are, and not so may of them these days. A lender like GMAC can help make that easier to some extent by taking on more risk or helping GM lose money on cars but they don't make the sale. And now GMAC is pointing out that it is the dealers business to lose at. BFD, who didn't know that. Any dealer that wants to make it through this recession needs to grab an increasing share of a smaller pie. That guarantees that some dealers won't make it. Again BFD we already know that. Seems like it's kill or be killed for GMAC. I do have a different feeling for dealers being put out by closing brands but that hasn't happened yet.