Bloomberg reports that GM Considers Buying back GMAC
Or starting a new unit.
Having its own financing unit will 'increase its profitabiltiy.'
"As a dog returns to his vomit, so a fool doth repeat his folly." Proverbs 26:11
Unless of course you get to keep the gains, and a greater fool, the public, assumes your losses.
It's good to be the King, but cheaper to lease one.
GM wants to re-enter auto financing
Tuesday May 11, 2010
DETROIT (AP) -- General Motors Co. executives want their own auto-financing arm so they can offer more competitive lease and loan deals, according to a person briefed on their plans.
The executives want to buy back the auto financing business from the former GMAC Financial Services or start their own operations, said the person, who asked not to be identified because the plans have not been made public.
A top GM executive has told dealers about the plans, the person said.
GM sold a 51 percent stake in GMAC Financial Services in 2006 when it was starved for cash. The new owners, led by private equity firm Cerberus Capital Management LP, ran into trouble in 2008 with bad mortgage loans and had to be bailed out by the federal government, which now owns 56 percent of the company.
Earlier this month, GMAC changed its name to Ally Financial.
GM dealers say that since GMAC is responsible for making its bottom line look good, it is less likely to lose money by offering to finance sweet lease deals or zero-percent financing. A GM-owned auto financing business would be more likely to "take a bullet" for the company to sell more cars and trucks, the person said.
Competitors, such as Ford Motor Co. or Toyota Motor Corp., control their own financing arms.
GM spokesman Tom Wilkinson said Tuesday that the company would not comment on speculation....