The Industry's Leading Source For F&I, Sales And Technology

Special Finance®

GMAC Eases Wholesale Charges, Will Consider Sub-620

April 01, 2009

DETROIT

GMAC Financial Services will

temporarily ease wholesale finance charges for dealers and earmark $5 billion

for consumer auto loans over the next 60 days, in an attempt to reduce the stress on U.S. auto dealers and expand the credit available to retail customers.

"Dealers have told us that cash flow is critical right

now," said GMAC President Bill Muir. "We want to do everything

possible to help dealers sell their inventory of cars and trucks, while

preserving their working capital during the next couple of months."

GMAC's actions for dealers, effective immediately, will

include:

· Eliminating all dealer curtailment payments for

aged inventory during the month of April. (Curtailment is a standard

practice in the industry that requires a portion of the wholesale loan to be

repaid after a vehicle has been in inventory for an extended period of time.)

· Waiving the fee for dealers to post aged

vehicles on SmartAuction, GMAC's leading online remarketing site, through June

to reduce their inventory and minimize future curtailment billings.

· Allowing qualified dealers the option to defer

wholesale interest charges for two 30-day periods during the next 120 days.

This deferment can be elected by the dealer beginning with the March billing.

Payment for the deferral period will be due 90 days following the deferred

month.

"The option to defer wholesale interest payments alone

can be a significant temporary boost to cash flow for most dealers," Muir

explained. "Our goal is to ease the burden on dealers over the next few

months as they work hard to lower costs, reduce inventory and protect their

financial stability."

For retail customers, GMAC will further enhance and expand

its already very competitive retail financing programs, adding:

· Certain rate reductions for new- and used-vehicle

financing.

· An increase in allowable advance rates for

60-month or less financing terms.

· The acceptance of automotive finance

applications for customers with credit bureau scores below 620. Customers will

still need to qualify, but this will expand the credit available to a broader

spectrum of buyers.

"GMAC now finances a broad spectrum of auto buyers,

similar to traditional levels," Muir said. "Through March, we

financed over $2 billion in new and used retail auto contracts. Over the next

60 days, GMAC will make available at least $5 billion in order to increase the

flow of credit to U.S.

automotive customers."

Muir added, "GMAC has funding available to stimulate

auto sales. We want to do our part to support both the U.S.

auto

industry and individuals in the market for a car or truck."

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  

CLOSE [X]

READ NEXT

Reahard, Impact Group Form Strategic Alliance

The Impact Group and Reahard & Associates Inc. have announced a strategic alliance to help provide each other's clients with best-in-class F&I training and technology. The partnership is the result of a collaborative effort between Reahard & Associates' Ron Reahard and Mark Thorpe of The Impact Group to enhance the capabilities of both the interactive menu and paper menu aspects of Impact's FUSION program.