GM Pulls the Plug on Used Car Incentive Early
It says no worries, guys. Why do you look so worried?
By David Surace
On Friday, GM spokesman John McDonald confirmed to Automotive News (sub req’d) that the automaker will indeed end a special financing deal for their certified used car program earlier than originally planned, specifying the lack of funding for credit as the primary cause. Naturally the words lack of funding causes alarm among the people who make money off of these cars, but there’s some explaining to do.
The original plan was as follows: GM would offer 3.9% financing for 60 months on all certified used Chevy Impala and Pontiac G6 cars, and Chevy Silverado and GMC Sierra pickups, purchased between this October 1st and January 5th. The change in plans moves the end-date back to November 3rd, this Monday. What’s a possible reason? The financing program was being run exclusively through GMAC Financial Services, until recently a very heavy (perhaps TOO heavy) bargaining chip in the merger talks between GM and Chrysler.
To put that in context, remember that GM has recently offered a new car financing incentive called Financing That Fits, which actively pushes buyers–and dealers–away from financing with GMAC, which had restricted its automotive loans to credit scorers of 700 and higher.
Dealers, however, are somewhat less inclined to let the lack of incentive roll off their backs. The Impala, G6, Silverado and Sierra are massive-volume models, and typically take up an enormous chunk of floorplanning at many dealers, as both new and used cars.
In fact, one of the sourced GM dealers in suburban Detroit, who claimed that those four models took up as much as 50% of his used inventory, went so far as to call the incentive recall a “bait and switch”. Some dealers had even paid more than normal for the cars at auction, once they knew there would be an incentive for them–only to have the incentive cut drastically short.
McDonald did, however, insist to Automotive News that another used car financing incentive would take its place on Tuesday, November 4th, but wouldn’t specify details about what it was or which models it would cover. If you insist on those models with that kind of financing, however, get thee to a GM Certified Used Dealer before the day is out.
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