GMAC President William Muir: The average GMAC vehicle loan is 55 months.
Muir was interviewed last week by Staff Reporter Gail Kachadourian and Retail Editor David Kushma.
How is your leasing business?
We have seen an increase in lease activity. For us, it's lease and SmartBuy, which is a balloon product very similar to lease, which works better in some states than other states. When we look at the two of them, there has been an increase proportionate to the financing business coming this year in leasing.
Has the average length of a vehicle loan been increasing or decreasing?
It hasn't really changed. It's about 55 months.
Do you want to increase your subprime lending?
To an extent, we have grown that business. The way we've grown it is with a focus on helping to sell new GM cars. The big difference between us and a lot of the players in the subprime or the near-prime market is that we do try to see if we can strategically support GM in that sector of the business, whereas the other players are pretty much totally focused on the used-car market.
How much retail funding do you provide non-GM dealers?
It's de minimis. It's always been de minimis. The way the market operates is that everybody does have a captive out there, and that's where the lion's share of their business goes.
Are you reducing your used-car loan business?
Our number-one focus is to help sell new GM cars and trucks. That's where we put our energy, and that's where we put our capital and other resources. We provide used-car financing largely as assistance to those dealers who are our good customers. But we don't aggressively go after the business.
What percentage of GM vehicles does GMAC finance?
We (wound) up year-to-date through September with about 40 percent of all the GM vehicles sold at retail being financed by GMAC. That's consistent with the kind of levels we've seen over the past seven years.
Is your upside-down problem manageable?
While it's become a big headline item, we have not seen any kind of fundamental change in that issue in our portfolio.
Tell us about GMAC's bank.
GMAC Automotive Bank, headquartered in Utah, was established in August 2004. So far, it's been very helpful to us. The bank's role is primarily to help us with cost-effective funding for some of our retail and lease assets.
You may e-mail Gail Kachadourian at [email protected]
You may e-mail David Kushma at [email protected]