Quote:
Originally Posted by RPO F55
You have the overall payment situation wrong as far as the auto industry works here in the US. GM, like all the domestics, invoices the dealer and is paid in full prior to the vehicle arriving at the dealership. The floorplan credit you refer to is with GMAC or some other bank, not GM the manufacturer. The vehicle cost sits on this floorplan account building interest (which the dealers makes payments on) until it is sold, the dealer then having only a day or two to pay off the balance amount once sold. To do otherwise would cause what is known as an out of trust situation and could threaten their floorplan account as a whole. But this is not with the manufacturer, who has already been paid in full - it is with the flooprlan company, or bank in GMAC's case. GMAC is separate from GM and is now a National Bank. They handle the majority of flooplan for GM and Chrysler since Chrysler Credit is being wound down and merged into GMAC. Ford Motor Credit handles most of Ford but is also a separate, financial institution although it is still owned by Ford. In all cases no vehicle shows up at the lot without the manufacturer having being paid in full.
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Yes, the process has changed comewhat since GM sold GMAC but guess who's on the hook to GMAC if the dealer has not paid for the car and the dealer goes bankrupt?
Secondly, you are assuming that it is not GMAC who is raising the red flag on the dealer. Here's an analogy for you. You (dealer) want to buy a house. House builder (GM) wants to sell you the house. You apply for a mortgage (GMAC) but the mortgage company turns you down. They tell the home builder that your credit sucks and you owe all sorts of money. Do you think the home builder is going to want to deal with you?