GM, lender write fewer longer-term loans

[DainBramaged]

Amid a virtual freeze on consumer credit, General Motors is emphasizing cash transactions over long loans, the company's sales chief said today.

"We've been writing fewer 72-month loans," Mark LaNeve, GM's vice president of North American sales, service and marketing, told Automotive News. "In September and October, we did a much higher percentage of cash -- meaning non-lease or non-APR, than we did in decades."

This week, GMAC Financial Services restricted some borrowers to loans of no more than 60 months.

The new restriction affects a "small percentage" of GMAC's loan volume, said company spokesman Sue Mallino. Mallino would not speculate on whether GMAC will expand the 60-month ceiling to more borrowers.

"We have been tightening our underwriting standards for over a year," she said. "We are still purchasing 60- and 72-month loans. At this time, there is nothing to indicate we will change that in the near term."

Mallino said loan volume tends to fluctuate based on the availability of incentives. GM recently funded a program of 0 percent interest on 72-month loans. Since the promotion ended, GMAC's volume of 72-month loans has dropped, Mallino said.

In September 2008, loans of 72 months or more accounted for 43.0 percent of all loans approved by GMAC, according to Power Information Network. That figure was down from 72.9 percent in July and about the same as the 42.0 percent in February.

By contrast, loans of 60 to 72 months accounted for 45.5 percent of all loans approved by GMAC in September, compared with 22.2 percent in July and 45.5 percent in February, PIN said.

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GM is not going out of business

http://www.autonews.com/article/20081009/ANA05/810090297/1078/ANA02&Profile=1078

[SammyWinstonJack]

1. My husband worked for a Chevrolet dealership in '04. We bought a Tahoe 0% on 72 mos.

Also got employee pricing. Basically paid what the dealership owned it for. It was fully loaded, all the bells and whistles. Nice Tahoe. Traded out of it when gas started to go up. He now works for a Ford dealership. Good to know that GM is not going out of business. My dad is a chevy guy, always has been. He has a 1960 chevy truck that he bought brand new. It's his baby and it still runs.

[DainBramaged]

2. Your Dad and I are very much alike

my first car was a '59 Impala, and my last car will be a Chevy. A couple of years ago I had to sell my Dad's '53 pickup. I wish I could have kept it. :yourock:

[SammyWinstonJack]

4. My dad has never forgiven Nadar for killing the corvair. My dad collects them and my first car was

'62 corvair. My next car was a '67 corvair monza.

[DainBramaged]

5. My SECOND car was a '64 Corvair Spyder, no lie

And what I would do today for that car, snd it was silver like this one. Put Corvette mufflers on it because the Turbo kicked in at 3000 instead of 4000 RPM

[SammyWinstonJack]

My Dad has one of those. He has a convertible corvair, too. Not sure of the

year. He belongs to a corvair club.

[SammyWinstonJack]

14. Nice car! I had a 2000 SS Camaro T-top limited edition

Also had a '95 Z28 camaro. Loved them both! My husband works in the car business and buys/trades cars, so I never know what I am driving, next. x(

[DainBramaged]

22. I stopped buying new cars in 2000, and leased my last car in 2003

I just sold my '98 Blazer and am driving in a 'revitalized' 95 Cavalier. And I get 29 MPG combined and all of the systems have been replaces or upgraded. A trade in. Next to nothing. The paint was peeling so I got a great runner. I don't give a shit how they look any more.

[SammyWinstonJack]

24. My car now is a '98 Pontiac Grand Prix. LOL! No bells and no whistles, paid $3000 for it.

It gets me where I need to go. And I am fine with that. But I sure did like driving those fancy cars. :-)

[DainBramaged]

27. Mine was $100!!!!

[SammyWinstonJack]

29. You got a great deal! I am jealous!

[DainBramaged]

30. I could have bought a Buick Le Sabre today, '94 with 88,000 miles

ORIGINAL owner, garage kept, needed tires, brakes and a tune up ($700+) traded it in for a Colorado truck. Worth $500, but HEAVILY smoked in so I passed. The wholesalers went nuts, and I don't know what the final price was, but after cleaning, it will make a fine first car for someone.

[RB TexLa]

3. The dinosaur needs to move out of the way.

[flvegan]

6. Damn. Time for me to stop eyeballing that new ZR1 I wanted.

At a third of the price, it outruns the Lamborghini Murcielago and outhandles the Ferrari 599. What an amazing car.

I'd need a 96 month loan to pay for it, though.

[DainBramaged]

7. Buy a Turbo Cobalt

http://forums.motortrend.com/70/6433552/the-general-forum/new-cobalt-ss-turbo-bows-8-22-min-on-nrburgring-ef/index.html

[SmileyRose]

8. IMHO 6 years on a car is idiotic.

That's a loan product that should never exist in the first place. They did it to get more people in new cars, I understand that, but for the buyer it just seems like it would be better to get them into a car they can afford.

[DainBramaged]

9. If it's ZERO percent financing is it still idiotic?

[SmileyRose]

12. That would be the only instance I might say it's cool

the few folks who qualify for 0% at 72 months probably don't need it. They are just smart enough to use GMAC's free money on a car purchase they already planned to make either way. For the vast majority who go 72 month's though, it's not 0%, and the reason they are going 72 months is to get a payment they can afford on a car that actually too expensive for them. So the finance mgr at the local Chevy store tells me.......

[TwixVoy]

13. Yes

Because you are in DEBT, and that is slavery.

[TwixVoy]

10. There are tons of fools out there

A car is a hole in your pocket.

[SammyWinstonJack]

11. If you can get 0$ financing, it's not idiotic. As long as you plan to keep it, that is. And GM

makes a good product.

[TwixVoy]

15. This is part of the reason we are in this mess

if you need to take out a multi-year loan on something - regardless of the interest rate - you can NOT afford it. I make less than 30K a year. I have made less than that my entire life. The highest level of education I can honestly put down on a job application is "some college". I am close to retirement, and I will retire with over $2 million in the bank. I have saved my entire life, and thought about money every day my entire life. I have monitored my investments every single day from the time I was 23 years old. I have multiple IRAs invested in mutual funds and CDs, I have a pension, and a 401K.

Do you know what my average contribution to my retirement accounts came out to be most of my years? About $400 a month. A car payment.

I have zero debt.

I have never owned a car worth more than $2000. I look back with no regrets.

[DainBramaged]

16. Please don't be offended, but if you saved all your life to retire

you don't have much life left to enjoy, and the options are very limited as to the physical 'excursions' you can take. My Father worked all of his life to retire, he died at 64 one year short. He never got to enjoy life or his retirement because it was all he lived for.

[TwixVoy]

17. Don't think I never enjoyed life

I had a great life. It just didn't require me to make high dollar purchases. After a certain point, thanks to compound interest, I ended up never having to worry about how I would pay my living expenses if I lost my job. That was part of what made life great.

[SammyWinstonJack]

19. Well good for you!

:thumbsup:

[SammyWinstonJack]

18. I hardly think that people taking out car loans got us into this mess we are in. But whatever.

If you are going to retire with $2mil, why be concerned with anyone having to take out a car loan? Buy one car and drive it forever, like my dad did. Something wrong with that? Oh and the stock market crash hasn't affected your retirement? You must be one of the lucky ones. And retail pays pensions? I worked retail and never had a pension plan. :shrug:

[TwixVoy]

23. Yes retail management does have pensions

and great 401K plans with dollar for dollar matching. I work for a multi-billion dollar retailer. Even though I am at the middle of store level management I have the same benefits package as most people at corporate.

The market had a marginal effect on my retirement. As I said I read about the economy every day of my life. A sound investment strategy as one gets older is to move from stocks to bonds. If you have your investments in stocks close to retirement age you risk losing a substantial amount and never gaining it back in time for retirement. 90% of my investments are in bonds, 10% (part of my 401K) is in stocks and is the only investment I have that has taken a heavy loss. No one close to retirement should have a majority of assets in stocks vs bonds.

[DainBramaged]

26. Macy's /Bambergers did, I remember, my Mom worked there

[TwixVoy]

28. Believe it or not

even though we retail workers get looked down on by many of our customers we actually can have very good benefits and (in some cases) pay isn't too bad either. If you are talking about the 16 year old cashier yea it's not that great... but if you make it a career it gets much better over time especially once you hit the management level. I am only a department manager and I get health insurance with a $200 deductable/unlimited life time coverage amount ($30 a paycheck for this), pension, 401K with dollar for dollar match, 160 hours of vacation a year, 32 hours of personal holiday. Most of that came with the length of service. The longer you stay the better the benefit package gets.

[DainBramaged]

31. I believe you, my Dad was the same way, but he never got to enjoy it

My Mom, who will be 92 in February, has been OK for years and years, but she misses him terribly, and she got to enjoy retirement thanks to him.

Please don't go down that path. Don't save to live, live to save.

[SmileyRose]

20. If you were putting away $400 a month "most of your years"

that would have been FAR more than a car payment. 40 years ago both my parents put together working 2 jobs each did not make $400 a month.

[SammyWinstonJack]

21. I think he might be full of it.

:shrug:

[TwixVoy]

25. Not really

the average of my investments (I am estimating) most of my life would come out to be $400/month.