Gm Looks To Credit Unions To Help Finance New Vehicles

[fbachman]

First thing I've heard that makes SENSE and has a chance to help....THE GOVT SHOULD DO THIS FOR HOUSING...

 

If interested, there is a link below.....

 

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DETROIT -- General Motors hopes a test finance program in the Midwest could become national -- a move that would give it access to new customers and as much as $150 billion in available auto loan financing.

 

 

Michigan Credit Union League, group of 1,200 credit unions from Michigan, Ohio, Indiana and Illinois, are part of the program with GM. The group has $23 billion in capital. It is making $10 billion available for low-cost auto financing to its more than 12 million members in that region.

 

The money could be used to buy a car from any automaker. But as part of a broader program, the credit union group has teamed with GM to offer supplier prices and a $250 price discount to members on a GM vehicle purchase.

 

"Our industry has been hard hit," said Mark LaNeve, GM's vice president of vehicle sales, service and marketing in a call today with reporters. It "runs on credit from the consumer to the dealer. Having access to credit and attractive rates is obviously a huge benefit for us and their members."

 

The plan is called Invest in America, and it's intended to spur the economy as well as benefit the credit unions' members, League President David Adams said during a conference call with reporters. The nation's 8,000 credit unions have about $150 billion in financing available that could help fund new auto loans, Adams said.

 

"Credit unions have been less affected by the credit crisis," Adams said. "They're stronger than they've ever been, so credit unions are in a financial position to do this."

 

The league is talking to Ford Motor Co. and Chrysler LLC about similar programs.

 

GM's U.S. vehicle sales plunged 21.9 percent through November compared with the same 11-month period of 2007. Tight credit markets -- and losses at GMAC Financial Services -- have choked retail sales this year.

 

How it works

 

The program started Monday and will run through June 30. It offers eligible vehicles with a price discount to credit union members and their households. Members who buy cars under the program also are eligible for $250 in bonus cash until Jan. 5.

 

With other discounts and rebates, the savings can be significant. For example, if a credit union member wanted to buy a 2008 Buick Enclave crossover that has a sticker price of $36,190, he would pay $31,199, plus get an extra $250 off if he purchases it before Jan. 5.

 

The program will be tested in the four states, possibly going nationwide early next year, Adams said.

 

"We're sending the message that credit unions are partnering to make that money (the $150 billion) available for these loans and other loans. The money could be used by consumers for another brand, but we've structured this to be clear that credit unions want to extend it to domestic brands."

 

Half-million sales

 

Adams said that as of Oct. 21, the average loan rate for a credit union was 5.4 percent compared to the average bank rate of 6.9 percent. While each credit union will determine whether it wants to run interest-rate promotions, Adams expects the new rates to drop to a range of 4.5 percent to 5.5 percent.

 

Often a credit union can offer buyers with lower credit scores a loan, whereas a bank will deny it, Adams added.

 

A $10 billion infusion of capital into the market equals about 400,000 to 500,000 potential new-vehicle purchases, said GM's LaNeve. "We may not get that much action on it, but it's potentially very, very big."

 

Adams agreed and added: "If this goes national, it could have an effect 10 times that amount."

 

GM started talking to the credit unions about a deal three months ago, LaNeve said.

 

GMAC has been struggling with funding. GM owns 49 percent of GMAC. Cerberus Capital Management LP owns the other 51 percent.

 

GMAC once provided funding for 40 to 50 percent of GM's auto loans and leases. Today, that has dropped to about 6 percent, LaNeve said.

 

GMAC has applied to the Securities and Exchange Commission to become a bank holding company. That is an attempt to get access to federal funds Congress made available to banks. But GMAC has said it may have to withdraw its petition because of an inability to refinance $38 billion in existing debt.

 

LaNeve said this deal with the credit unions should not compete with GMAC because it is intended to be a service to the members of the Midwest credit unions participating.

 

"We still like this partnership, and we would have done it anyway because of the access to their customers," LaNeve said. "This would have been a deal we would have done even when we were doing aggressive finance programs two or three years ago. It's access to new customers."

 

One Michigan dealer says while the program is welcomed, he has some reservations about it because dealers lose the exclusivity they build with customers.

 

"It's like giving someone else your customer list with all the names and information that you've been trying for decades to withhold," says John Rogin owner of John Rogin Buick in suburban Detroit. "It's good and it's bad: they're here for us now, they've got money, and I'm glad to have them but there's going to be a consequence."

 

"I think it's fantastic, " says

 

Gordon Stewart, whose family owns Chevrolet dealerships in Michigan, Florida and Georgia, said the program is "fantastic."

 

"Anybody willing to finance automobiles right now is a real blessing," he said. "For Chevrolet in the Midwest, it'll be a tremendous asset."

 

As to any concerns that dealers would lose the exclusivity on customer information, Stewart said: "Right now that's a small price to pay. We need sales for survival."

 

Helping Americans

 

The credit union program could help GM dealers find new financing sources for customers.

 

"Credit unions have a long history of helping hard-working Americans in troubled times," said Daniel Mica, CEO of the Credit Union National Association.

 

Credit union members can find details on the discounts at www.lovemycreditunion.org and obtain an authorization number to take to any GM dealership.

 

The price discount is on purchases of eligible new Buick, Cadillac, Hummer, Saab, Chevrolet, GMC, Saturn and Pontiac vehicles.

 

Adams said: "We want to encourage investment in America, and when times are tough, you roll up your sleeves and find a way to do that."

[jrrod2004]

First thing I've heard that makes SENSE and has a chance to help....THE GOVT SHOULD DO THIS FOR HOUSING...

 

If interested, there is a link below.....

 

----------------------------------------------------------------------------------

 

DETROIT -- General Motors hopes a test finance program in the Midwest could become national -- a move that would give it access to new customers and as much as $150 billion in available auto loan financing.

 

 

Michigan Credit Union League, group of 1,200 credit unions from Michigan, Ohio, Indiana and Illinois, are part of the program with GM. The group has $23 billion in capital. It is making $10 billion available for low-cost auto financing to its more than 12 million members in that region.

 

The money could be used to buy a car from any automaker. But as part of a broader program, the credit union group has teamed with GM to offer supplier prices and a $250 price discount to members on a GM vehicle purchase.

 

"Our industry has been hard hit," said Mark LaNeve, GM's vice president of vehicle sales, service and marketing in a call today with reporters. It "runs on credit from the consumer to the dealer. Having access to credit and attractive rates is obviously a huge benefit for us and their members."

 

The plan is called Invest in America, and it's intended to spur the economy as well as benefit the credit unions' members, League President David Adams said during a conference call with reporters. The nation's 8,000 credit unions have about $150 billion in financing available that could help fund new auto loans, Adams said.

 

"Credit unions have been less affected by the credit crisis," Adams said. "They're stronger than they've ever been, so credit unions are in a financial position to do this."

 

The league is talking to Ford Motor Co. and Chrysler LLC about similar programs.

 

GM's U.S. vehicle sales plunged 21.9 percent through November compared with the same 11-month period of 2007. Tight credit markets -- and losses at GMAC Financial Services -- have choked retail sales this year.

 

How it works

 

The program started Monday and will run through June 30. It offers eligible vehicles with a price discount to credit union members and their households. Members who buy cars under the program also are eligible for $250 in bonus cash until Jan. 5.

 

With other discounts and rebates, the savings can be significant. For example, if a credit union member wanted to buy a 2008 Buick Enclave crossover that has a sticker price of $36,190, he would pay $31,199, plus get an extra $250 off if he purchases it before Jan. 5.

 

The program will be tested in the four states, possibly going nationwide early next year, Adams said.

 

"We're sending the message that credit unions are partnering to make that money (the $150 billion) available for these loans and other loans. The money could be used by consumers for another brand, but we've structured this to be clear that credit unions want to extend it to domestic brands."

 

Half-million sales

 

Adams said that as of Oct. 21, the average loan rate for a credit union was 5.4 percent compared to the average bank rate of 6.9 percent. While each credit union will determine whether it wants to run interest-rate promotions, Adams expects the new rates to drop to a range of 4.5 percent to 5.5 percent.

 

Often a credit union can offer buyers with lower credit scores a loan, whereas a bank will deny it, Adams added.

 

A $10 billion infusion of capital into the market equals about 400,000 to 500,000 potential new-vehicle purchases, said GM's LaNeve. "We may not get that much action on it, but it's potentially very, very big."

 

Adams agreed and added: "If this goes national, it could have an effect 10 times that amount."

 

GM started talking to the credit unions about a deal three months ago, LaNeve said.

 

GMAC has been struggling with funding. GM owns 49 percent of GMAC. Cerberus Capital Management LP owns the other 51 percent.

 

GMAC once provided funding for 40 to 50 percent of GM's auto loans and leases. Today, that has dropped to about 6 percent, LaNeve said.

 

GMAC has applied to the Securities and Exchange Commission to become a bank holding company. That is an attempt to get access to federal funds Congress made available to banks. But GMAC has said it may have to withdraw its petition because of an inability to refinance $38 billion in existing debt.

 

LaNeve said this deal with the credit unions should not compete with GMAC because it is intended to be a service to the members of the Midwest credit unions participating.

 

"We still like this partnership, and we would have done it anyway because of the access to their customers," LaNeve said. "This would have been a deal we would have done even when we were doing aggressive finance programs two or three years ago. It's access to new customers."

 

One Michigan dealer says while the program is welcomed, he has some reservations about it because dealers lose the exclusivity they build with customers.

 

"It's like giving someone else your customer list with all the names and information that you've been trying for decades to withhold," says John Rogin owner of John Rogin Buick in suburban Detroit. "It's good and it's bad: they're here for us now, they've got money, and I'm glad to have them but there's going to be a consequence."

 

"I think it's fantastic, " says

 

Gordon Stewart, whose family owns Chevrolet dealerships in Michigan, Florida and Georgia, said the program is "fantastic."

 

"Anybody willing to finance automobiles right now is a real blessing," he said. "For Chevrolet in the Midwest, it'll be a tremendous asset."

 

As to any concerns that dealers would lose the exclusivity on customer information, Stewart said: "Right now that's a small price to pay. We need sales for survival."

 

Helping Americans

 

The credit union program could help GM dealers find new financing sources for customers.

 

"Credit unions have a long history of helping hard-working Americans in troubled times," said Daniel Mica, CEO of the Credit Union National Association.

 

Credit union members can find details on the discounts at www.lovemycreditunion.org and obtain an authorization number to take to any GM dealership.

 

The price discount is on purchases of eligible new Buick, Cadillac, Hummer, Saab, Chevrolet, GMC, Saturn and Pontiac vehicles.

 

Adams said: "We want to encourage investment in America, and when times are tough, you roll up your sleeves and find a way to do that."

 

 

 

I just became a member of UFCU but they are not in the midwest. Hope this goes national so they can extend this offer and I can 'convince' my parents to buy more GM vehicles.