GMAC Will Fuel Chrysler’s Comeback
Chrysler Group officials made it clear last Wednesday that securing the financing needs of its dealers will be key to realizing its $500 million, five-year plan. GMAC responded the following day by saying that it’s quickly ramping up efforts to becoming the preferred financing source of Chrysler dealers and customers.
Chrysler Group LLC officials made it clear last Wednesday that securing the financing needs of its dealers will be key to realizing its $500 million, five-year plan. GMAC Financial Services responded the following day by saying that it’s quickly ramping up efforts to becoming the preferred financing source of Chrysler dealers and customers.
Chrysler officials were expected to hit the road Tuesday to explain the coming changes in Chrysler’s product lineup and marketing efforts – including the prospect of metro area dealers selling the hip new Fiat 500 – which is expected to rival the Mini – by the end of 2010. Peter Grady, one of the Chrysler execs expected to join the road show, said during last week’s press conference that he expects the financing problems that about 5 percent of its dealers are experiencing will be resolved by the end of November.
According to GMAC’s Nov. 5 statement, the company expects more than 90 percent of the original 1,474 Chrysler dealers which originally applied for wholesale financing to be approved in the near future. GMAC currently provides wholesale financing for 67 percent of Chrysler’s U.S. dealers and 85 percent (1,247 dealers) of Chrysler’s inventory in Canada.
Officials added that 84 Chrysler dealers are in final negotiations for wholesale financing. Fifty-eight dealers have already received conditional approval, including 41 dealerships that had problematic real-estate and working capital loans under Chrysler Financial. Eighty-five dealerships, or less than 6 percent, were notified in June that they were not approved for wholesale financing, a majority of which were previously on “finance hold” with Chrysler financial.
When GMAC was tapped to become Chrysler Group’s preferred lender in April, the company said it would enter a six-month process to vet Chrysler’s dealers for wholesale credit lines. And as of Sept. 30, GMAC’s outstanding balance of wholesale financing of Chrysler dealers was approximately $3.3 billion.
Additionally, GMAC said it helped originate $720 million Chrysler retail loans in October, or 24 percent of Chrysler’s U.S. retail sales.
“In addition to providing retail and wholesale financing, GMAC has brought new technology and services to the Chrysler dealer body, such as the SmartAuction remarketing tools for pre-owned vehicles,” read GMAC’s Nov. 5 statement. “We expect to finalize the remaining Chrysler inventory financing agreements soon, and look forward to building GMAC’s relationship with Chrysler dealers and customers.”
More Auto Finance

Interest Rates Further Squeeze Auto Consumers
Last month’s hike and a potential second increase this month add to a growing list of inflation woes that could continue to dent overall car sales.
Read More →
Mind Your Process
Consistent steps taken in various aspects of the F&I office can make valuable differences over time, similar to an outline for a best-selling book.
Read More →
Top Five Credit Application Fraud Flags
Compliance audits regularly reveal bad habits that can lead to fraud charges and should have been stamped out decades ago.
Read More →
More Auto Loans for the Taking in August
Riskier categories were on the uptick for the month as lenders loosened access in several areas while balancing out the exposure in another, Cox Automotive reported.
Read More →
July Was Hot for Auto Borrowers
Credit proved readily available for many, but most loans left buyers in negative territory, Cox Automotive said.
Read More →
Dealer Lender Preferences Revealed
When lenders provide consistent, fast service, their overall satisfaction scores with dealers greatly improve, according to JD Power research.
Read More →
Auto Refi Savings Surge
Consumers with 84-month auto loan terms who refinanced saved the most on monthly payments, according to a new report by auto refinancing provider Caribou.
Read More →
Subaru Enters Lending Business
The automaker follows other brands in adding captive financing in the U.S., and says the move will strengthen its position here.
Read More →
Positive Equity Reaches Record High
Mainstream vehicle owners who bought a car seven years ago are likely to have positive equity when trading in for a new vehicle, according to second-quarter Edmunds data.
Read More →
Dealerships Are Paying the Price for Extended Car Loans
Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.
Read More →