General Motors Financial Co.’s consumer originations in North America were at $1.93 billion in the fourth quarter, up from $1.15 billion from the same time last year, but down slightly from the third quarter when consumer originations were at $1.96 billion, according to the company’s 4th quarter earnings, released today.
Of those total originations for the quarter, $1.21 billion were for loans originated from new and used vehicles by GM dealers. $720 million were from loans originated by non-GM dealers.
On November 1, 2014, GMF rolled out a prime loan product to all GM dealers, and in 2014 prime loan originations totaled $493 million. The increase in prime origination and shift in portfolio mix is expected to “favorably impact credit metrics over time,” according to the earnings release.
GM lease originations in North America were at $2.07 billion in 4Q, up from $1.74 billion in 3Q and up from $650 million during the same period a year ago. The total lease portfolio in North America now stands at $7 billion. The company attributed the growth in 2014 to broader, more competitive product offerings and improved dealer acceptance.
The lease side of GMF’s portfolio is projected to continue to rise in 2015, following the announcement that the captive will be the exclusive provider of U.S. leases for Buick and GMC brands, an agreement that went into effect yesterday.
Chief Operating Officer Kyle Birch previously told Auto Finance News that GMF had combined its lease and loan operating systems in 2014, which gives underwriters the ability to get the dealer a lease and loan approval at the same time.
During the captive’s earnings call today, President and Chief Executive Dan Berce said that there has been a lot of talk in the news about the exclusive lease agreement since the announcement, but it shouldn’t have come as a surprise. The exclusive partnership is about improving consumer loyalty and leasing, and while it is not without its risk, is a profitable business, one that GM wanted to bring under the company umbrella.
“Lease just made a whole bunch of sense,” Berce said, “given the import of that product to the OEM.”