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GM To Lend To Dealerships

GM is going to be making some huge financial leaps in the near future, as they are working to build up their brand and make sure that no one is out doing them. The main goal that most people are talking about is the fact that GM is looking into turning their Financial department into a lending operation for dealerships. In this way, they hope to provide dealers with the option of obtaining new vehicles via a loan from the company in which they would repay after selling the vehicle on their lot. 

This would not be GM's first venture into the lending industry, as they were responsible for GMAC until they sold this off to pay for debts that were increasing before they declared bankruptcy. So why the sudden interest in doing the lending option again? The automaker is worried that with other main automakers such as Ford having lending options that GM could fall behind the loop. However, they are already using their financial department to lend money to qualified buyers, they want to increase this in order to spur on more business. 

The problem that people are pointing out with the decision to loan dealers money for the new purchase of cars is that GM is going to have a lot to compete with. The company is going to have to be able to offer low interest rates that are going to entice dealers to do this, instead of using the bank or lender that they already use. It is all going to be about the relationship that the automaker has with each dealership. 

Dan Ammann is the one person behind this radical change of lending, as he used to work for Morgan Stanley. However, through his leadership, GM has managed to do fairly well for himself, so more than likely lending to dealerships will happen with Ammann in the lead for this project.