GM Financial to begin offering wholesale loans to dealers by the end of 2011

Article by Christian A., on June 1, 2011

By the end of the year, GM Financial will start to offer wholesale loans to dealers. This move is meant for it to get an edge over its rivals and to offer better rates for dealers to spend for new inventory. According to GM Financial CEO Dan Berce, the loans will expand dealers' options for floorplan financing. Berce said that currently, Ally Financial offers floorplan financing to over 70% of GM dealers.

Before General Motors bought GM Financial last fall, it was known as AmeriCredit Corp.

In an interview with Automotive News, Berce said that dealers will receive the “best deal” in terms of advance, structure, rate, and service due to the fact that it will join the market and its platform will be built to scale. He said that dealers are offered “a different look." Since 2006, GM has not operated a full-scale lending operation.

This was the year that it sold a majority stake of the former GMAC Inc., now known as Ally. According to GM executives, the company wants to give more options to dealers to buy inventory.

Berce said that GM Financial will select five dealers who will test the floorplan program by the end of the year. He said that GM anticipates that this program will be launched throughout the nation in 2012.

He explained that Ally's domination of floorplan financing for GM dealers is an “unacceptable” risk to GM. Berce added that it would be bad for GM if Ally suddenly finds that they “don't like 20% of the dealers they floorplan, or maybe they get bought by a big bank who doesn't like the business.”

Topics: gm, united states

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