Dealer Financing Litigation
GMAC: Dealer Financing Litigation Reaches Settlement
DETROIT, Feb. 11 -- General Motors Acceptance Corporation (GMAC) today
announced that a settlement agreement has been reached in the litigation
regarding dealer financing practices (Coleman, et al. v. GMAC, U. S. District
Court for the Middle District of Tennessee).
'The terms of the agreement preserve fair competition while taking new
steps to provide GMAC consumers with the knowledge to make the most informed
choice for their auto financing,' said Greg Merryman, attorney for GMAC.
'GMAC will continue to provide its customers with great value and fair
treatment. It is a hallmark of our company. We are proud of our commitment
to diversity and our dedication to creating an environment that enables our
employees and dealers to contribute fully toward the pursuit of total customer
satisfaction.'
The terms of the agreement include:
-- A new contract disclosure that will state: 'The Annual Percentage Rate
may be negotiable with the Seller. The Seller may assign this contract and
retain its right to receive a part of the finance charge.' The disclosure
will be placed on the front of all contracts near the signature line and will
take effect within 180 days of the settlement's approval by the court;
-- The maximum difference between the APR and the buy rate, for a period
of three years following the settlement's approval, will be equal to or less
than 2.5 percentage points, and for contracts with more than 60 monthly
payments the maximum difference will be equal to or less than 2 percentage
points;
-- GMAC will contribute $1.6 million toward consumer assistance
initiatives for the purpose of improving the education of, and assisting
consumers with respect to, credit financing. Contribution recipients will be
organizations focused on African American and Hispanic outreach efforts;
-- GMAC will implement a new marketing initiative with the goal of
reaching out to African American and Hispanic consumers to generate 250,000
pre-approved offers of credit each year for the next five. If the goal is not
reached, GMAC will continue until 1.25 million offers of credit have been
issued;
-- The credit offers will provide eligible consumers with specific dollar
amount pre-approval that can be used to finance the purchase of a GM vehicle.
Each credit approval will be tied to a special rate purchase offer -- where
there would be no discretionary dealer finance income as part of the financing
contract; and
-- There will be no payments to the class members. Attorney fees for
counsel of class members are capped at $9 million and expenses are capped at
$600,000 -- both amounts must be approved by the Court.
GMAC encourages consumers to take advantage of these terms. In the
extremely competitive auto finance industry, consumers have many options
including banks, credit unions, and dealer financing. For nearly 90 years,
GMAC has helped millions of American consumers buy the cars they want to
drive. This settlement will allow GMAC to keep providing these vital services
and will further define GMAC as a true industry leader.
SOURCE General Motors Corporation
-0- 02/11/2004 P
/NOTE TO EDITORS: For additional media information, visit
http://media.gm.com ./
/CONTACT: Dan McGinn of The McGinn Group, +1-703-312-0140; Jim Farmer of
GMAC, +1-313-665-6091; or Mark Tanner of General Motors, +1-313-665-3146/
/Web site: http://media.gm.com
http://www.gm.com /
(GM)
Latest directors dealings
- 3 minutes ago MJ Gleeson
- 6 minutes ago Rolls-Royce Holdings
- 40 minutes ago Crest Nicholson Holdings
- 1 hour ago Naked Wines
- 1 hour ago Greencoat UK Wind