General Motor Co.’s captive earned $74.6 million and originated $935 million of loans and $10.7 million of leases in the final quarter of 2010.
By comparison, GM Financial, as the financing unit is called, originated $378.6 billion of loans and no leases in the fourth quarter of 2009. At the time, prior to GM’s acquisition, the company was known as AmeriCredit Corp.
Financing for GM vehicles accounted for 18.1% of originations in 4Q10, compared with 10.8% in 4Q09. At yearend, GM Financial Co.’s portfolio totaled $8.7 billion, down 9.4% from $9.6 billion at Dec. 31, 2009.
Delinquency rates and chargeoff levels improved in the quarter. Year over year, 60-day delinquencies fell to 2.4% from 3.7%, while chargeoffs dropped to 5.5% from 8.9%.
GM Financial’s earnings came on the heels of General Motors Co.’s first full year of profits since 2004.
Transparency is a cure for “perceptions”. The auto finance industy simply could ask itself to justify any transaction with rates and fees above those charged to customers with excellent credit and then document the resultant pools of credit to show that they know what they are talking about because they are usually stating that the marginal increase above excellent credit is to pay for the associated incremental risks. Of course, the real answer is that it cannot be justified. Just one more reason why bankers ar perceived as “Untrustworthy”. And,the good bankers are loath to air the dirty laundry. I wonder why not?