DETROIT -- General Motors built its GM Financial subsidiary into a full-line captive finance arm over the past five years to help sell more cars and eliminate a significant competitive disadvantage.
But there is another reason: Customers will like it better, GM North America President Alan Batey believes.
"If you look at the new-vehicle sales process, the one area that clearly there's an opportunity to improve the experience is around financing," Batey said in an interview last week.
Batey said the hassle and delays in getting bank approval for a lease or loan and completing the paperwork rank among customers' biggest gripes about buying a new vehicle. The hodgepodge of lender requirements and processes that dealership F&I offices must master don't help.
GM's dealers agree. Batey said discussions with dealers in part led GM to "double down strategically" on taking more control of the process.
"This was the No. 1 area they felt there was a huge opportunity to do much better," Batey said. "It's mostly about how we use a fresh approach and take dealer input about where the pressure points are."
In January, GM made GM Financial its exclusive provider of subsidized leases. The captive also is taking a bigger role in financing purchases for prime customers, in addition to its traditional strength in subprime business.
Batey believes GM can streamline financing for new-vehicle customers partly through information technology. Over the past three years, the company has made a huge bet on IT, hiring thousands of workers to develop and maintain proprietary systems and solutions.
Brad Sowers, owner of Jim Butler Chevrolet in Fenton, Mo., and chairman of the Chevrolet National Dealer Council, says speeding customers through the F&I office is critical.
"A lot of our customers are dual-income with kids. They're not looking to spend three hours at the dealership trying to buy a car," Sowers says.
GM Financial's bigger role also should give dealers a clearer view of the customer, Sowers says. It's easier to track customers' automotive credit history and where they are in the buying cycle.
"By knowing that customer from the start," Sowers says, "every decision can happen faster, from the rate to the down payment to the trade-in."
GM also is exerting itself in the F&I department by rolling out its own protection products. It is building a direct sales force of more than 80 employees to sell branded coverage, such as Chevrolet Tire and Wheel Protection.