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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.

by Staff
November 10, 2009
2 min to read


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.

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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.”

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