DETROIT (April 1, 2009) -- GMAC Financial Services is initiating some extraordinary actions today to reduce the stress on U.S. auto dealers and to expand the credit available to retail customers. GMAC will temporarily ease wholesale finance charges for dealers and earmark $5 billion for consumer auto loans over the next 60 days.
"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 include:
- Eliminating all dealer curtailment payments for aged inventory during the month of April. (Note: 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 month.
"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 financial stability."
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 financing.
- 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. automotive customers."
Muir added, "GMAC has funding available to stimulate auto sales. We want to do our part to support both the U.S. auto industry and individuals in the market for a car or truck."
About GMAC Financial Services
GMAC is a bank holding company with operations in North America, South America, Europe and Asia-Pacific. GMAC specializes in automotive finance, real estate finance, insurance, commercial finance and online banking. As of Dec. 31, 2008, the organization had $189 billion in assets and serviced 15 million customers around the world. Visit the GMAC media site at http://media.gmacfs.com for more information.