GMAC Related News on Leasing, Financing

[mpsrent]

Reuters

DETROIT–Finance company GMAC said Tuesday it would stop financing most vehicle leases in Canada, a shake-up in strategy that could could threaten GM sales and underscores the growing pressure on North American auto sales from tight credit.

The end of subsidized leases on GM vehicles in Canada, which takes effect Friday, follows a more sweeping move by Chrysler Financial to end vehicle leasing in the U.S. market, announced last week.

Both GMAC and Chrysler Financial are controlled by private equity firm Cerberus Capital Management.

GMAC spokeswoman Gina Proia would not discuss whether the finance company would consider suspending vehicle leases on GM cars and trucks in the U.S. market.

More here:
http://www.thestar.com/Business/article/469112

[mpsrent]

This will certainly change the way Canadians obtain vehicles and will likely have North American ramifications.

The end of subsidized leases is a polite way of saying we are getting out of the leasing business. With subisidized car purchasing so common, a high interest rate, low residual lease won't be attractive to anyone. This could certainly hurt GM, especially if the competition still overs subsidized lease payments on Toyota's and Honda's as they currently are doing.

[JVal14]

I don't know if it will necessarily change things in the US because the Canadian dollar is worth a bit more than the US dollar; that means any cost they experience on a Canadian deal is magnified once it's translated into $US. They may even be wagering that the $US will fall even more against the $CA. Or maybe GM just thinks their cars will be better priced than the competition.

[doh]

http://www.reuters.com/article/marke...0080729?rpc=44

DETROIT, July 29 (Reuters) - GMAC is considering ending subsidized leases on General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) cars and trucks in the U.S. market, a step similar to the pullback the finance company has announced for Canada, according to an executive with a U.S. dealership briefed on the plan.

GMAC is controlled by Cerberus Capital Management CBS.UL, which owns 51 percent of its stock. The remainder is held by GM.

Analysts and auto dealers have said actions to tighten terms on lease

[tirediron]

Anybody know where I should put my resume in at?

From a BPG Sales(I mean Lease, all we do is lease)man.
At least for now.

[TheGeneral]

Sounds like somebody got burnt by the Truck leases when they expired.

[Buickman]

predict it can't hold. orders for production will be tough to come by, GM will come begging. the uproar from franchisees will be unbearable. attractive leases will be back by Labor Day.

[prowlerjc]

Originally Posted by TheGeneral

Sounds like somebody got burnt by the Truck leases when they expired.

Hmmm...I guess that would explain all the trucks over on the used car side...

[2002 Caddy]

Originally Posted by TheGeneral

Sounds like somebody got burnt by the Truck leases when they expired.

Yup, over the last 4 or 5 months were one of the rare times that the consumer came out financially ahead. While most people lease... Unless you can write of the lease payments on your taxes you will find you are almost always better off to buy... The rare exception to this is right now... with the bottom dropping out of the truck market... Since the lease effectively "locks in" the residual value of the car/truck... This time if you leased... you won. Of course that means that GM, GMAC, and/or the dealers are feeling the pain.

[delmarjohn]

I just got off the phone with the finance man at a prominent dealer here in SD...he said residuals are going up as are interest payments....he said they are trying to work with some lenders but he said there programs are poor at best...........from what I heard they were taking it bad on the trucks and suv's ,ford said the lease program on trucks and suv's technically are gone .GM is changing credit requirements on all leases ,and they are easing back on trucks and suv's for now .................I purchase cars ....they should not be affected but he gave me no assurances that the game on them is changing........I laese all of my cars .....why I live in ca ...I get no credit for trade ins .....so I pay through the nose on sales tax ...on a lease I only pay sales tax on the actual payments for 36 months .....I have saved 10's of thousands over the years ...1000..onsales vs 4000 on purchase every three years or so so 4 cars later I have paid what I would have paid on one ....4000...vs 16000.........GM if they still wantmy business had better figure out something or for the first time on 33 years I will be buying foreign....this goes to what I have always said ..when someone else controls your future you have NO future ...big short term mistake to sell controlling interest in your financial arm...cerebus owns chrysler and controls GMAC ..which executive thought this was a good long term idea

[Vinsetta]

GMAC reduces financing for high-risk customers


Jamie LaReau

Automotive News | July 29, 2008 - 4:38 pm EST




DETROIT -- General Motors dealers will have to put high-risk customers into less expensive vehicles or get higher down payments than in the past, now that GMAC is tightening its financing policies.

Over the past year, GMAC has tightened its underwriting criteria and curtailed financing to customers considered to be credit risks, says Sue Mallino, GMAC spokeswoman. The policy applies both to leases and loans.

“We have reduced financing for high-risk customers,” Mallino says. “We want to carefully manage and limit our losses.”

Mallino denied a report that GMAC has halted all leases to customers with the lowest credit ratings. She said that other factors, such as size of the down payment and employment status, could result in a low-rated customer getting approved for a lease or loan. But she said that GMAC generally is not a subprime lender.

“In general terms, GMAC is not a subprime credit company,” Mallino says. “About 80 percent to 90 percent of our credit is in the prime arena for auto financing in the U.S.”

One dealer says GMAC’s caution is good for dealers. “This is just good business,” says John Rogin, owner of John Rogin Buick in Livonia, Mich. “Ultimately, it will be good for the dealers, too. We can’t have someone coming in and looking at a Cadillac STS with no money down and bad credit.”

Like other lenders, GMAC is sensitive to stress in the market, Mallino says. But since tightening its financing to subprime consumers over the past year, GMAC has slightly reduced the number of loan delinquencies.

[mpsrent]

Another video story here:

http://news.sympatico.msn.ctv.ca/hom...howbyline=True

[dindak]

Problem is, GM REFUSES to lower their prices in Canada in spite of a Canadian dollar that is virtually at par with the U$ and now used US cars are flooding the Canadian market and KILLING resales.

Perfect example... I looked at a 1 year old Aura XR with 6000 miles from the U.S. listed for C$19,950, new these are over $32K.

[fp115]

Originally Posted by dindak

Problem is, GM REFUSES to lower their prices in Canada in spite of a Canadian dollar that is virtually at par with the U$ and now used US cars are flooding the Canadian market and KILLING resales.

Perfect example... I looked at a 1 year old Aura XR with 6000 miles from the U.S. listed for C$19,950, new these are over $32K.

GM does not refuse to lower prices. It is simply impossible to do so, because the market does not allow it. If GM lowers the prices and competitors don't, GM loses money and value. All Canadian products are more expensive than US ones and it is not only GM.

[Buickman]

Originally Posted by fp115

GM does not refuse to lower prices. It is simply impossible to do so, because the market does not allow it. If GM lowers the prices and competitors don't, GM loses money and value. All Canadian products are more expensive than US ones and it is not only GM.

"impossible"...ridiculous statement

"market does not allow it"...irrational claim

"all Canadian products are more expensive"...seriously doubt it.

just more examples of foolish, off the cuff, remarks from someone more silly than sensible.