The new incentive program underscores the severe retail lending restrictions implemented by GMAC Financial Services, GM’s partially owned finance unit.
An Oct. 7 memo to dealers summarizes the upcoming program. According to a copy obtained by Automotive News, the program pays up to $250 in incentives for non-GMAC transactions. Salespersons get $100, sales managers get $100 and the dealer can designate an employee of choice to receive another $50.
The term of the incentive program is unclear. Eligible vehicles include all 2008 and 2009 Chevrolet, Pontiac, Buick, GMC, Hummer, Cadillac and Saturn vehicles, according to the memo.
'Just throwing money down a hole'“It is an encouragement for dealerships to seek out other sources of funding,” said Mike Mullaney, dealer principal of Hudson Pontiac-Buick-GMC in Poughkeepsie, N.Y. He is a member of GM’s national dealer council and is familiar with the incentive offer. “There’s no question that program is tied in with the GMAC message.”
GMAC announced Oct. 13 that it would only finance retail vehicle customers with credit scores of 700 or higher. GMAC, which is controlled by majority owner Cerberus Capital Management LP, has tightened other lending terms in recent days as the global credit crisis has intensified. GM owns 49 percent of GMAC.
One dealer called the idea of paying bonus money for deals with non-GMAC lenders “stupid.”
“That’s just throwing money down a hole,” said Tommy Brasher of Brasher Motor Co., a Chevrolet and Buick dealership in Weimar, Texas.
A GM spokesman declined to comment on the program. GMAC declined comment on the matter.
Donna Harris contributed to this report
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