GMAC to Finance Chrysler Vehicles

In his address a few moments ago on the auto industry, President Obama announced that GMAC will handle wholesale and retail financing for Chrysler.

Chrysler Financial would have needed more funds than the administration was willing to shell out to make it a viable entity, Obama said.

I think it’s important to have a single company managing Chrysler floorplans, but do we have to assign a single company to handle retail loans? It seems to me that opportunity should be made available to any financiers who step up to the plate.

Tags: chrysler, floorplan, gmac, retail, wholesale

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Comment by JJ Hornblass on April 30, 2009 at 2:44pm: Transcript of Obama Comments on Chrysler Financial:

The path we're taking also involves steps to shore up financing, because we cannot have viable car companies without strong car financing companies. It's now clear that Chrysler Financial -- the institution that finances Chrysler cars and dealers -- would on its own require an unacceptably large stream of taxpayer money to remain viable -- and that's something I refuse to provide. And that is why, as part of this agreement, GMAC, an independent bank holding company that finances General Motors, has agreed to finance new Chrysler sales. We will be providing additional capital to GMAC to help unlock our frozen credit markets and free up lending so that consumers can get auto loans and dealers can finance their inventories; a measure that will help stabilize not only our auto market, but the broader economy, as well. And tomorrow, the Small Business Administration will be announcing it is expanding eligibility for some loans to include more suppliers and dealers, including RV dealers.

Comment by JJ Hornblass on April 30, 2009 at 2:46pm: Background Comments on Chrysler Financial from a Senior Administration Official:

Lastly, a critical element as we identified 30 days ago among the hurdles that we needed to accomplish for Chrysler to be viable is a viable finance source for the company. We made the determination that Chrysler Financial did not have the resources and it was not really within our means to provide the resources to Chrysler Financial to support Chrysler Car Company.

And so we are also very pleased today to announce an agreement between new Chrysler and GMAC, which you all know provides not only financing to General Motors but many other kinds of financing. And GMAC will become the financing source for new Chrysler cars going forward from this time. And the U.S. government will provide the financial support necessary for GMAC to expand its activities to include new Chrysler.

Comment by Joe Bruner on May 1, 2009 at 10:09am: All financing for dealers with Chrysler Financial has been halted leaving dealers short of cash with little hope for survival. Dealer trades must be accomplished with checks (cashier's checks preferred) not through floorplan swaps. Standard rated contracts may be accepted by CF but all other programs seem to be off.

Comment by Marcie Belles on May 1, 2009 at 10:14am: Joe -- Has there been any word to dealers of GMAC at all?

Comment by Michael Cole on May 1, 2009 at 12:15pm: It seems like these things are never thought through. The impact on Chrysler dealers is devastating. Chrysler may survive, but will any dealers?

Comment by Joe Bruner on June 19, 2009 at 8:09am: House Bill 2743 needs everyone's support....however even if it passes and returns the franchises to the terminated Chrysler dealers we will have no inventory to sell until the 2010's are built and shipped. I am afraid all we can hope for is some type of compensation for our losses.

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