GM expands West Coast low-APR loan program
General Motors revived and expanded a program last month to offer 0 percent loans and other subvented deals for new cars via Wells Fargo Dealer Services.
The expanded program has about 330 dealership participants in California, Washington and Oregon, Dawn Martin Harp, president of Wells Fargo Dealer Services, told Automotive News.
GM and Wells Fargo Dealer Services ran a low-APR pilot program, including 0 percent loans, last year in May and June. The pilot involved about 50 dealerships.
The expanded low-APR program began in early January and will run through the end of this month, GM spokesman Tom Henderson said.
Henderson said GM had approached Ally Financial about participating in the program, but Ally declined.
GM's partnership with Wells Fargo is part of an erosion of what was once a monopoly on GM incentives held by the former GMAC, now Ally Financial. GM also has a partnership with U.S. Bank to provide leases.
Ally is still the preferred lender for GM. However, under an agreement with Ally, GM can offer incentives via other lenders as long as it offers the same deals to Ally. That restriction ends Jan. 1, 2014, according to SEC documents.
Ally is also the preferred lender for Suzuki, Maserati and the Chrysler Group brands, plus Fiat, in the United States.
Wells Fargo Dealer Services is the nation's biggest used-car lender.
It's also a major new-vehicle lender. Wells Fargo Dealer Services was No. 8 in new-vehicle loans among all lenders in the third quarter of 2011, up from No. 9 the year before, according to Experian Automotive. Among banks alone, Wells Fargo ranked fourth in new-vehicle loans for the third quarter.
"We're still a big used-car lender," Wells Fargo's Martin Harp said, "but our new[-car] share is up."
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