Buyers May Feel Squeeze of Value Pricing
Dealers want General Motors to help upside down buyers during the shift to value pricing, but GM executives would rather add the negative equity onto GMAC loans than use dealer cash to assist the buyers.
Dealers want General Motors to help upside down buyers during the shift to value pricing, but GM executives would rather add the negative equity onto GMAC loans than use dealer cash to assist the buyers.
Dealers sat that dealer cash could help, though, and so could capital cost investments, according to Automotive News. GM officials say another option is for dealers to cut their margin to close the deal.
Many dealers have used incentive money to help pay down the negative equity, but the number of incentives available should soon fall and sticker prices are going to his closer to transaction prices.
GMAC estimates that 20 percent of its customers are upside down, but dealers say that number is larger, the report said.
Another argument is that financing upside down buyers forces long-term loan committal and deepens negative equity.
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