If the AmeriCredit acquisition works as General Motors Co. intends, GM dealers will lease more vehicles and arrange more loans for buyers with low credit scores.
GM's acquisition of AmeriCredit Corp., scheduled to close Friday, Oct. 1, provides the automaker with a captive finance arm once again. The $3.5 billion deal should lead to higher vehicle sales for both GM and dealerships, representatives of each say.
"If we get some incentivized leases out there that are a little bit more aggressive and a little more subprime financing, it would certainly help our volume," said Tim Copenhaver, dealer principal at Champion Chevrolet-Cadillac in Johnson City, Tenn.
Two-plus years ago, some of those subprime customers could buy vehicles easily despite their troubled credit, Copenhaver said. But their financing options haven't recovered in today's market.
"Daily, we have some subprime customers who we can't get qualified because there's just nowhere to go with the paper," Copenhaver said.
GM spokeswoman Annalisa Bluhm said the acquisition of AmeriCredit will give dealerships a better range of financing options for nonprime customers, plus more leasing ability.
"Our dealers have been quite vocal: Give me a program where I can sell cars," Bluhm said.
Higher sales are likely, she said, though GM did not share projections. About 40 percent of consumers have credit scores of less than 680, which is considered below prime.
"That's huge," Bluhm said, adding that AmeriCredit has proved it can manage the risk effectively.
A regional lease program will launch by March, although Bluhm said details on regions, brands and nameplates have to be worked out.
AmeriCredit will be renamed General Motors Financial Co. but will continue to operate as AmeriCredit for its non-GM dealer customers. Non-GM business provides the majority of AmeriCredit's volume — almost two-thirds of the lender's overall originations and about 55 percent of new-vehicle originations, Bluhm said.
GM's 4,500 dealerships are not required to use GM Financial, and the automaker is continuing its relationship with Ally Financial, formerly known as GMAC Financial Services. Ally will continue to focus on prime customers and wholesale financing for dealers, Bluhm said.
That was good news to Copenhaver, who said, "We do a ton of business with Ally and get wonderful service."