DETROIT — GM Financial's loan and lease originations climbed in the third quarter, even as General Motors' U.S. light-vehicle sales fell 9.9 percent, and more customers paid their loans on time, despite economic uncertainty.
Only 2.1 percent of payments were 31 to 60 days past due during the quarter, compared with 3 percent in the third quarter of 2019.
"In a period of higher unemployment and economic uncertainty, we would normally see higher delinquency and higher losses. It was completely against the trend of what we should see," Dan Berce, CEO of GM Financial, told Automotive News.
Government stimulus cash and relief provided by GM Financial helped consumers early in the pandemic, he said. But lately, consumers have changed their spending behavior to prioritize paying off debt.
"They're not spending money on entertainment, vacations and restaurants," he said. "Instead they are making debt payments, in particular automobile payments, because they have to have a vehicle without traditional access to mass transit or Uber."
Even after supplemental unemployment payments expired in July, GM Financial hasn't seen significant changes in consumer payment rates, he said.
"We extended deferments to 6.7 percent of the [loan] customer base between the middle of March until the end of June. All of those customers are making payments now and only a single-digit amount have needed another extension," he said. "It is fair to say that that is past us at this point and isn't a factor in portfolio performance."