View Full Version : GMAC - 700+ FICO Score Required
In a reaction to tight credit markets GMAC has advised its dealers that will grant credit to customers that have credit scores below 700. They also indicated that they will be shortening the terms of most auto loans - trying to discourage 72 and 84 month financing.
If that wasn't enough, they've also advised dealers that their flooring expenses would be increasing by 75 basis points. (3/4 of 1%)
Here's a link to the news report: http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSN1347702720081013
If you're a GMAC dealer, that's a lot of bad news to absorb. :(
CL Pgh
10-13-2008, 02:51 PM
:(
Knock knock...
Who's There?
Sir...
Sir Who???
CERBERUS!!!
:(
Knock knock...
Who's There?
Sir...
Sir Who???
CERBERUS!!!
With a 75 basis point increase in their flooring rate I don't think too many GMAC dealers would be answering the door if they knew that it was Cerberus that was doing the knocking. :(
okcarl
10-14-2008, 12:50 PM
We just gone done with a sit down with the regional guy from GMAC. Their corporate response was that they needed to look at where they could best serve the dealers and they felt that there was no way they could be competitive with the other banks on the customer finance side. So they are putting what cash they have towards keeping the wholesale floor plan rates for dealers as low as possible. He also stated that the 75 basis point jump noted in the article was the cost of auto finance rates going up and that dealers wholesale floor plan is not going up. We are a platinum dealer and that is all out the window. We were told to find financing for our customers wherever we could.
dealer3100
10-14-2008, 02:14 PM
Wow, its not just CFC. But what do both companies have in common???????
knock knock
We just gone done with a sit down with the regional guy from GMAC. Their corporate response was that they needed to look at where they could best serve the dealers and they felt that there was no way they could be competitive with the other banks on the customer finance side. So they are putting what cash they have towards keeping the wholesale floor plan rates for dealers as low as possible. He also stated that the 75 basis point jump noted in the article was the cost of auto finance rates going up and that dealers wholesale floor plan is not going up. We are a platinum dealer and that is all out the window. We were told to find financing for our customers wherever we could.
Great information - thanks. :)
Concerning the 75 basis point jump in flooring costs, you would think that if the news report was wrong that GMAC would have pushed for a retraction.
Concerning GMAC's comment that you should go wherever you can to get your customers financed is simply a sad reflection on our times. I remember hearing stories that GM and GMAC were so powerful at one time that they had a Corporate Policy that a GM rep and a GMAC rep couldn't be at the same store at the same time.
Now they've reached to point where they'll happily give up a deal to the local Credit Union if it means that GM gets to sell one more car.
Quick question - what did you lose when GMAC discontinued their Platinum Program?
bluechevrolet
10-15-2008, 11:14 AM
It's a good thing that we have about 15 other lenders that we can use. The biggest thing this hurts is the GM Certified Used Cars and the special interest rates they carry througgh GMAC.
dealer3100
10-15-2008, 03:40 PM
From Automotive News:
General Motors dealership personnel will earn bonus money for sending consumer financing deals to non-GMAC lenders.
The new incentive program underscores the severe retail lending restrictions implemented by GMAC Financial Services, GM's partially owned finance unit.
An Oct. 7 memo to dealers summarizes the upcoming program. According to a copy obtained by Automotive News, the program pays up to $250 in incentives for non-GMAC transactions. Salespersons get $100, sales managers get $100 and the dealer can designate an employee of choice to receive another $50.
The term of the incentive program is unclear. Eligible vehicles include all 2008 and 2009 Chevrolet, Pontiac, Buick, GMC, Hummer, Cadillac and Saturn vehicles, according to the memo.
From Automotive News:
General Motors dealership personnel will earn bonus money for sending consumer financing deals to non-GMAC lenders.
The new incentive program underscores the severe retail lending restrictions implemented by GMAC Financial Services, GM's partially owned finance unit.
An Oct. 7 memo to dealers summarizes the upcoming program. According to a copy obtained by Automotive News, the program pays up to $250 in incentives for non-GMAC transactions. Salespersons get $100, sales managers get $100 and the dealer can designate an employee of choice to receive another $50.
The term of the incentive program is unclear. Eligible vehicles include all 2008 and 2009 Chevrolet, Pontiac, Buick, GMC, Hummer, Cadillac and Saturn vehicles, according to the memo.
Wow, it's just incredible to think that it has come to the point that GM pays its dealers to send business AWAY from GMAC.
The spin on the AutoExtremist website is that GM is not happy with Cerberus and GMAC and this is the reason they're paying their dealers to send deals to other lenders.
It seems unreal, but at this point anything that puts some extra money in the pockets of dealership employees is a good thing. :)
As negotiations with GM and Cerberus continue over the fate of Chrysler, it seems increasing clear that Cerberus is using GMAC to exert pressure on GM.
One could argue that the new 700+ FICO score requirement has more to do with getting favorable terms from GM on a Chrysler merger than it does about reducing GMAC's portfolio risk.
It looks like Cerberus is playing hardball and the dealers are caught in the middle.
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