GM Financial plans to begin offering wholesale loans to dealers by year end, a move that could stoke competition and improve rates for dealers to finance new inventory.Hit the jump to read the res of the story.
GM Financial plans to begin offering wholesale loans to dealers by year end, a move that could stoke competition and improve rates for dealers to finance new inventory.
GM Financial CEO Dan Berce said the loans will expand dealers’ options for floorplan financing. Today, Ally Financial provides floorplan financing to more than 70 percent of GM dealers, Berce said. GM Financial was known as AmeriCredit Corp. before its purchase by GM last fall.
“The fact that we’ll enter the market and have a platform that we’ll build to scale is going to give the dealers the best deal, whether it’s advance, structure, rate, service,” Berce told Automotive News editors and reporters today. “It just provides them a different look.”
GM has not run a full-scale lending operation since 2006, when it sold a majority stake of the former GMAC Inc., which is now Ally. GM executives have said the automaker would like to give dealers more options to buy inventory.
Berce said GM Financial will choose a handful of dealers to test the floorplan program by year end. He expects to roll out the program nationally in 2012.
He said Ally’s domination of floorplan financing for GM dealers represents “a risk to GM that is unacceptable.”
“If for some reason Ally all of a sudden wakes up and they don’t like 20 percent of the dealers they floorplan, or maybe they get bought by a big bank who doesn’t like the business, GM is left holding the bag,” Berce said.
