Auto dealers say they are still waiting for the benefits they expected from General Motors' spinoff last year of the former General Motors Acceptance Corp. Their anticipation of sharply lower interest rates, tied to the newly independent GMAC Financial Services, has not been met.
"The whole concept was to establish a better credit rating than (GMAC) could get being tied directly to GM — ultimately, to see rates that would compete with banks," said Tom Durant, who owns Classic Chevrolet in suburban Dallas and six other Texas dealerships.
"GMAC is a good partner," Durant told Automotive News. "They're the same as they've always been, but they haven't got any better."
In November 2006, GM sold 51 percent of its captive finance company to an investment group led by Cerberus Capital Management LP. The investors agreed to pay $14 billion over three years for their majority stake in GMAC.
GMAC's spinoff from troubled parent GM initially prompted improved credit ratings. That made it cheaper for GMAC to borrow money.
And GMAC passed those savings along. Early this year, the company said it had cut dealership interest rates by nearly a percentage point on new- and used-vehicle retail contracts in the United States. The report did not disclose what those rates were.