GMAC raises floorplan rates, reduces lease programs

[Vinsetta]

GMAC raises floorplan rates, reduces lease programs

Jamie LaReau
Automotive News
July 31, 2008 - 3:38 pm ET


DETROIT -- In a letter to General Motors' dealers today, GMAC Financial Services says it will raise interest rates for dealer floorplan financing and boost consumer financing rates

CONTINUTED AT LINK:

http://www.autonews.com/article/2008...671266366/1142

[doh]

The sprilal begins, Ceberus watching as a financial enity, GM looking as a manufaturing company.

Sorry all this doesn't look good.

Less product on dealer's lots means if you are in "Need of a car, the Honda lot offers more choices"

GM dealers have always been more of a "They build it, We sell it" community, "Keep our money with who feeds me" attitude.

I have watched my "Dealer Princapal" sign a $12000 cheque, for 1 month of interest, in a 150 unit/year dealership.

Thats almost an extra $100/unit @ normal interest

[Buickman]

Originally Posted by doh

The sprilal begins, Ceberus watching as a financial enity, GM looking as a manufaturing company.

Sorry all this doesn't look good.

Less product on dealer's lots means if you are in "Need of a car, the Honda lot offers more choices"

GM dealers have always been more of a "They build it, We sell it" community, "Keep our money with who feeds me" attitude.

I have watched my "Dealer Princapal" sign a $12000 cheque, for 1 month of interest, in a 150 unit/year dealership.

Thats almost an extra $100/unit @ normal interest

Red Ink Rick

[adplusone]

Lost deep in this story is that GMAC will be ending the SmartBuy program on 10-1-08.

So monthly payments to customers will either increase 20-30% (same term) as they are moved into straight payments OR they will be moving to 72 months...neither of which is good for the customer or GM.

Sounds like a win win to me...

[M_RABID]

Leasing residuals stay the same on most cars, BUT interest rates jump 2% across the board.
The only GMC with a lease program still in effect is the Acadia. (rate up 2% from 6.25 to 8.25... Enclave is at 10%!!)
Envoy, Sierra and Yukon leases have ended. (Canyon and Savana never REALLY leased well anyway.)

Envoy does get 0% to 72 months WITH $1000.00 bonus cash (+$2000.00 if you qualify for lease pull ahead). That gives you a payment comparable to the old Envoy lease, but you are CEMENTED into that vehicle for ATLEAST 4 years (if you drive low miles!) depending on how trade in values look in the future. So much for flipping vehicles every two or three years.

THIS IS NOT GOOD!

[Joe in T.O.]

What exactly are floorplan rates?

[doh]

Originally Posted by Joe in T.O.

What exactly are floorplan rates?

What GMAC charges dealers for holding thier product.

Most dealers do not buy the vehicles in stock, they just pay interest on them.

I rember GMAC's call to our dealership once. "Hello this is so and so, with GMAC" "Do you realize that you have 75 units in stock?"

My boss say's "Yes I do" Theyy say "Do you realize that you have a limit of 55 units?"

My boss say's "I guess I have a new limit huh?"

GM dealers have stuck with GMAC much more than Ford dealers, so I have noticed. But that has changed recently, with Mortages at prime + 6%, and now higher floor plans, I see more and more dealers, jumping ship to banks like Scoitia.