Show me the money. With apologies to Cuba Gooding Jr., that is exactly what many General Motors dealers are saying to GMAC Financial Services.
Despite being given $5 billion from the U.S. Government last month, GMAC apparently hasn't loosened its purse strings enough for dealers' likings. Some, in fact, are reporting that GMAC keeps rejecting their credit applications. This is somewhat surprising because GMAC previously agreed to lower the necessary minimum credit score ratings from 700 to 621 for new vehicle loans, so presumably more requests should be going through. Dealers are frustrated and although some preferred dealers have seen loan rate reductions, others are saying that GMAC is still as much as 1.5 percent higher than the competition.
In response to this problem, dealers have come up with a wish list of sorts. They are asking that GMAC return to leasing, approve some sub-prime loans and cut interest rates for loans to dealers to help finance their inventory. Also of concern is the fact that customers are increasingly upside down on their trade-ins. As a direct result, these consumers are having trouble getting approved because GMAC requires bigger down payments than it once did.
[Source: Automotive News, sub. req.]