GMAC Financing Favoring GM Dealers Over Chrysler Stores

Robert Farago
by Robert Farago

Automotive News reports that bailout binging, eleventh-hour-back-room-rule-change bank (and former captive financier) GMAC has one set of rules for Chrysler dealers, another for GM’s. “Chrysler dealers must make monthly payments totaling 10 percent of the original outstanding balance on new vehicles that have been sitting on the dealership lot at least a year. [Plus a $25 “surcharge” per year-or-older car.] By contrast, GM dealers make monthly payments totaling 10 percent of the original balance on new vehicles that have sat on dealership lots at least 18 months. [Plus a $15 “surcharge” per year-or-older car.] Hey! Not fair! “And GMAC will finance just 80 percent of the purchase price when Chrysler dealers buy used vehicles at auction, compared with 100 percent for GM dealers.” Double not fair! GMAC’s reasoning (or lack thereof) after the jump.

“We are trying to waterboard thousands of dealers in a quick time frame,” says GMAC spokesman Mike Stoller. “We’re part of the industry solution, not the problem.” Just kidding, he said “on-board.” But it still doesn’t explain the discrepancy. Neither does this:

Stoller refuses to discuss details of GMAC’s interim floorplan agreement with Chrysler dealers. In a few months, the lender will renegotiate long-term finance agreements. At that time, GMAC may consider more favorable loan terms based on the dealer’s individual merits, Stoller says . . .

“For a lot of dealers, this is like negotiating the price of a life preserver while the ship is sinking,” says Mike Charapp, a McLean, Virginia, dealer attorney.

Robert Farago
Robert Farago

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  • Dr. No Dr. No on May 25, 2009

    It will be interesting to see the terms GMAC offers to GM dealers once GM enters C11. Chrysler, last time I checked, is in C11, so there's greater risk to GMAC. Risk/Reward --why the surprise here? If the terms are not equivalent after GM's C11, then you can make your own "fairness" arguments.

  • Anonymous Anonymous on May 26, 2009

    [...] From The Truth About Cars: GMAC has one set of rules for Chrysler dealers, another for GM’s. [...]

  • Anonymous Anonymous on May 26, 2009

    [...] From The Truth About Cars: GMAC has one set of rules for Chrysler dealers, another for GM’s. [...]

  • Anonymous Anonymous on May 27, 2009

    [...] From The Truth About Cars: GMAC has one set of rules for Chrysler dealers, another for GM’s. [...]

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