Car Dealer Insider Mar 1, 2009
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Car Dealer Insider Mar 1, 2009

Merger of two lenders offers retail financing alternatives for car dealers

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Merger of two lenders offers retail financing alternatives for car dealers

Count _Car Dealer Insider among the skeptics when news reports of a tightening in the availability of credit for car buyers started to surface. For every article about customers with high credit scores being rejected by the banks and captive finance companies, there was a story from some other part of the country touting banks' willingness to do business as usual with car dealers. It turns out we should not have been so dubious. Leave it to Mike Jackson, chief executive at AutoNation, to provide some hard figures to support his contention that the lack of credit at the retail level was killing car sales.

During his keynote speech at the Philadelphia Auto Show in late January, Mr. Jackson showed a slide that he has been using in presentations around the country. The slide indicates that in the month of December for all of AutoNation's stores, Chrysler Credit approved just nine loans. General Motors Acceptance Corporation (GMAC), which Mr. Jackson jokingly dubs General Motors Rejection Corporation, approved slightly more than that number.

What's the answer?

So if tight credit for car buyers from traditional lenders is a reality, what's to be done about it? What's left - "Tote-the-Note" lots, more buy-here, pay-here operations? Those approaches take significant capital investments at a time when new and used... (216 of 864 words)

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