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DETROIT - Within the last month or two, GMAC Financial Services has significantly loosened its purse strings, making it easier for Chrysler Group customers to get loans to buy cars, Chrysler dealers told Automotive News.
Easier approval for consumer loans is a welcome sign for many Chrysler dealers, who have been hobbled by tight credit since Chrysler's former captive finance company, Chrysler Financial, ceased consumer leasing in August 2008.
GMAC declined to provide specifics on its increased retail penetration but issued a statement: “We're committed to supporting dealers in their sales efforts, and have ramped up our volume of retail financing quarter-to-quarter.”
Earlier today, GMAC posted its first quarterly net profit since the fourth quarter of 2008. GMAC said it earned $162 million in net income during the first quarter as U.S. auto sales strengthened.
Some Chrysler dealers initially felt GMAC treated them like second-class citizens after President Barack Obama announced April 30, 2009, that GMAC would succeed Chrysler Financial as the captive finance company for Chrysler Group dealers.
Easing of tight credit will help Chrysler dealers as they struggle to get by while waiting for a new generation of vehicles to emerge from the alliance with Fiat Auto. Chrysler is launching the 2011 Jeep Grand Cherokee in June or July, but most of the Fiat-based products will not arrive until 2012-2013.
GMAC has been able to offer more loans partially because Ally Bank, its retail subsidiary, recently got a $7 billion revolving credit line from a syndicate of lenders. The U.S. Department of Treasury has invested more than $16 billion in GMAC since December 2008 and held a 56 percent stake in the company as of last December.
GMAC also provides wholesale floorplan loans to about 1,500 of Chrysler's 2,332 dealers. Transitioning the floorplans of all those dealers from Chrysler Financial was a difficult process, but many Chrysler dealers have praised GMAC for getting the job done in under a year. A few scattered Chrysler dealers have been unable to get floorplans because they still owe large sums to Chrysler Financial.
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