GM buys AmeriCredit to serve as its new captive-financing operation
In a move that should prove good news for would-be car buyers with less-than-stellar credit ratings, General Motors announced it will acquire American Credit Corporation, which is one of the country's leading independent auto financing firms. Terms outlined in the $3.5-billion all-cash "definitive agreement" will see GM once again get its own captive finance operation that will allow it to deal more quickly, flexibly and directly with current demands for leasing and non-prime contracts. In addition to effectively filling a void that was created by GM's divestiture of its GMAC (now Ally Financial) operations over the course of the past several years, the automaker says it will create "significant growth opportunities for both General Motors and AmeriCredit."
GM has been involved with AmeriCredit since September of last year, when it launched a successful non-prime program that helped the automaker increase its sales despite ongoing grim financial times. According to GM Chairman and Chief Executive Officer, Ed Whitacre, direct ownership of AmeriCredit's expertise will provide consistent availability of non-prime financing for GM customers throughout all economic cycles. "This acquisition supports our efforts to design, build and sell the world's best vehicles by expanding the financing options we can offer to consumers who want to buy GM vehicles. Adding AmeriCredit to our team will improve our competitiveness in auto financing offerings."
"With AmeriCredit providing us niche capabilities in leasing and non-prime financing, along with the continued strong support of Ally Financial and others for prime retail and dealer financing, we've set up a very competitive solution for our financing needs, which will be resilient through credit and business cycles," said GM Vice Chairman and Chief Financial Officer, Chris Liddell.