GMAC has struggled due challenges in both the housing and automotive sectors. Luckily, GMAC’s auto lending division appears to be getting back into shape.
While recent earnings reports from GMAC showed far steeper losses in Q1 of 2009 compared to earning a year prior, it did show that the first quarter also saw an increase in new auto loans compared with the stagnant fourth quarter of 2008.
What is also good news for GMAC auto financing is that the company will begin serving Chrysler retailers this month says New Jersey Dodge, following GMAC’s decision to diversify its auto finance business. Previously, Chicago Chevrolet dealers points out that GMAC’s auto finance business has revolved exclusively around sales of General Motors vehicles.
In the fourth quarter of 2008, GMAC saw its most turbulent performance. With dealers closing their doors, car buyers refraining for new car purchases, and the ongoing credit freeze, GMAC was finding difficultly in raising funds. With no new loans coming in, Fort Lauderdale Commercial Vehicles says GMAC was able to become a bank holding company and also received funds from the U.S. Treasury Department via the Troubled Asset Relief Program.
The Treasury purchased about $5 billion shares of GMAC, while also loaning money to GM. While the auto finance company is far from being out of the woods, one commercial equipment leasing company says there are certainly positive signs that the auto lending business has seen its worst performance. (more…)
