GMAC Tells Some Car Dealers It May Halt Financing Amid Capital Constraints

[marmar]

GMAC May Halt Financing to Some GM Dealers to Purchase Vehicles

By Greg Bensinger

Oct. 30 (Bloomberg) -- GMAC LLC, the lender partly owned by General Motors Corp., is telling some GM dealers it will no longer provide them with financing to buy vehicles because of its own reduced funding, according to letters sent to the retailers.

Some dealers also are being told that they will have to start repaying such loans after vehicles have been on lots for at least 180 days, according to the one of the three letters. Gina Proia, a spokeswoman for Detroit-based GMAC, yesterday declined to confirm them.

Hundreds of the retailers may have received such letters in recent weeks, Denny Fitzpatrick, chairman of the California New Car Dealers Association, said in an interview. The automaker has about 6,500 U.S. dealerships.

``Turbulence in the markets reduced our access to funds and increased the cost of funds where available,'' GMAC Chief Executive Officer Al de Molina said in a letter sent Oct. 21 to the California group. ``In response, we adjusted our credit policy to reflect the reduced level of funding availability.'' .........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aeGQ8WQtb_XQ&refer=home

[KamaAina]

1. In a completely unrelated story, Hawai'i's Aloha Airlines abruptly shut down earlier this year

because their chief creditor pulled the plug on them. Result: Interisland fares shot through the roof, and it's tough to even get a seat on short notice.

Oh, wait a minute, their chief creditor was...

...wait for it...

GMAC! So I guess it isn't really unrelated after all. :grr: