Will General Motors Bankruptcy Affect GMAC Customers
by Steve Cypher on Monday, June 1st, 2009General Motors Chapter 11 bankruptcy filing may have customers of GMAC worried about their loans.
General Motors bankruptcy
Here at Auto Credit Express, most of have been waiting since the Chrysler filing last month for the other shoe to drop, and today it did as General Motors announced that it, too, had filed for Chapter 11 bankruptcy. And although GM isn’t located as close to our headquarters as Chrysler (Chrysler headquarters is just a mile away from the ACE offices), both the GM Technical Center and GM’s World Headquarters are less than 20 minutes away. It also means that another one of our neighbors, as well as what was once the largest automaker in the world, finds it necessary to go through a bankruptcy filing in order to remain a viable business.
And while the glare of today’s spotlight has been trained on General Motors, many current GM customers may also have some questions regarding GMAC, the former captive finance company of GM (that is now a bank holding company) that is also still partly owned by Cerberus (the investment group that purchased Chrysler from Daimler). So how will this all shake out during GM’s bankruptcy?
Statement from GMAC
Anticipating these concerns, GMAC issued a press release prior to GM’s press conference this morning announcing clarifying their position in regards to GM’s bankruptcy filing:
DETROIT, June 1 – GMAC Financial Services is a creditor of General Motors Corp. (GM) and as such is taking the appropriate steps to protect GMAC’s interests during GM’s restructuring.
GM has submitted a motion to the U.S. Bankruptcy Court that, pending approval, would allow its direct business with GMAC to continue in the ordinary course during GM’s restructuring. In addition, GMAC has been advised by GM that GM will take appropriate steps in the bankruptcy court to authorize a purchaser of the assets to comply with all of the contracts with GMAC, including all payment obligations.
GMAC continues to provide automotive financing products and services to GM and Chrysler dealers and customers, including retail auto originations, wholesale financing, insurance products, and servicing of customer loans. The company’s non-automotive activities also continue uninterrupted.
GMAC is a bank holding company with a newly appointed board of directors and a diversified ownership structure. GMAC has not filed for bankruptcy, nor does it intend to, and the company continues to meet all of its obligations.
Current GMAC customers
This means that despite the General Motors bankruptcy filing, both GM and Chrysler customers can expect the following:
GMAC will continue to service new GM and Chrysler customers at the retail level. This means that when you finance a new Chrysler through any General Motors or Chrysler, Dodge or Jeep dealer, the captive lender will be GMAC (eventually, for Chrysler, through a branded lender for dealers backed by GMAC).
GMAC will continue to offer floorplanning financing to all GM dealers currently with General Motors Acceptance Corporation.
Finally, GMAC will continue to service its portfolio. This means that for all current customers of GMAC, it will be “business as usual.” You will continue to make your payments to GM Acceptance just as you have in the past.
The future
Although GMAC customers will see no changes in the near term, changes are already in the works. GMAC has already created a new online-only banking entity, called Ally, to attract new customers by offering a variety of savings products, including no-penalty CD’s and savings accounts (and has come under fire from the American Bankers Association for offering rates “well above the market”).
But in spite of all these changes, GMAC customers can rest assured that General Motors Acceptance Corporation will continue to service their loans.
