GM to promote dealer financing options
GM to promote dealer financing options
Move comes in response to new GMAC lending restrictions
Automotive News | October 15, 2008 – 12:01 am EST
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General Motors, in the wake of lending restrictions by its partially owned finance unit, will begin an advertising campaign reminding consumers that they can still finance vehicles through GM dealerships.
GM’s national dealer council learned about the plans during a 30-minutes conference call with GM officials today.
News of the advertising message follows GMAC Financial Services’s stringent new restriction on credit, announced Monday.GMAC said it would only finance retail customers with credit scores of 700 and above.
Some 43.5 percent of new and used U.S. vehicle loans financed during the second quarter were for customers with credit scores under 680, according to data from research firm Experian Automotive. That’s compared with 37.8 percent during the same quarter of 2007.
The upcoming campaign puts GM in the position of steering dealer customers to financing channels other than its 49-percent owned GMAC affiliate. Cerberus Capital Management LP acquired a majority 51 percent stake in GMAC from GM in 2006.
GM needs to emphasize that dealers have financing options besides GMAC, say dealers who listened in on the call.
"GM would put in its ads that dealers have financing available so customers don’t have the impression that they have nowhere to go," said Mike Bowsher, president of the Carl Black Automotive Group in suburban Atlanta.
GM spokesman John McDonald said he could not confirm GM’s plans to advertise.
