— 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
· 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
"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
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
· 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.
Muir added, "GMAC has funding available to stimulate
auto sales. We want to do our part to support both the U.S.
industry and individuals in the market for a car or truck."