TUCSON, Ariz. - When General Motors Acceptance Corp. discovered that 755 vehicles were missing from Mario Torres' dealerships, it was financing inventories on a consignment basis.
That's unlike the method used in the United States. U.S. auto dealers finance vehicle inventories through a 'floating lien,' which works much like a mortgage. In Mexico, a bank or a financial institution like GMAC actually owns the cars and allows a dealer to sell them on consignment.
If dealers default in their payments on their inventory, lien holders in the United States can repossess the vehicles, provided they do not breach the peace. In Mexico, vehicle owners cannot repossess their vehicles without becoming liable for charges of robbery. So the cases go to court.