At the onset of the pandemic in March, GM Financial, in partnership with GM, began offering 0 percent interest, 84-month loans and deferred payments of up to 120 days to customers in top credit tiers. Customers who didn't qualify for the 0-for-84 offer received other promotional rates. The incentives drove second-quarter retail loan originations up 22 percent from the previous year even as many dealerships had to temporarily close or limit operations because of the pandemic.
Dealers also received a bonus flat fee from GM Financial without increasing the customers' rate.
"You had a competitive customer program, but at the same time it was focused on dealer profit as well. That came together very nicely and really timely," Hollandsworth said.
The captive also offered dealers floorplan payment relief and guaranteed that their dealer dividend payment, which is based on retail loan penetration and other factors, would be consistent with the previous month.
GM Financial had offered payment relief for customers in the past, but the pandemic marked the first sweeping offer on the floorplan side.
The captive's latest version of its dealer dividends program also launched at the height of the pandemic, on April 1. The iteration allows dealers to put their bonus dollars toward operations to offset floorplan costs, for example. Previously, the funds were reserved for customer rebates.
"The matrix of how you earn the dividends is easier to follow and simpler," said Keith McCluskey, dealer principal at McCluskey Chevrolet in Cincinnati. "It works out to be more beneficial to the dealer, and you can earn more dividends and convert those to cash at month end."
Sales increased about 25 percent — or by 100 vehicles — per month since McCluskey signed on with GM Financial. He says the increase would be even higher without the impact of the pandemic.