GMAC No "Mac Daddy" For Californians

California auto dealers are hopin' mad at the recent bump in credit qualifications enacted by GMAC. The head of the California Auto Dealer Association warned that as many as 40 percent of California car buyers would not qualify for an auto loan after the change.

Many in the industry feel that GMAC's actions are more of a squeeze play by Cerberus Capital Management to force GM into taking Chrysler off their hands. Whatever the case, GMAC is a shining example of what happens when an automaker no longer controls its financing arm. Whereas a captive finance company such as Toyota Financial can continue to offer sweetheart deals to Toyota buyers, GM must go hat in hand the Cerberus and accept whatever terms it deems appropriate since GM no longer holds a controlling interest.

In its defense, a GMAC spokeswoman said "We recognize the stress on dealers because of the credit crisis, and work with dealers on a individual basis. In some cases, we are taking steps to manage our credit exposure as the auto industry softens and dealer creditworthiness declines."


source: gmac