Today’s GMAC announcement will cool the markets

February 27, 2009

I just got word that GMAC is calling dealers to notify them about a new floor plan policy. Program and off-lease vehicles will be floored at 90% of purchase with a required 10% curtailment each month ,up to a limit of 90 days. Trade-in vehicles (as if there are any), will be floored for a maximum of 70% of clean Black Book with the same curtailment and age limit. As of this moment, this news is unofficial and there may be some additional details to follow.

This will undoubtedly take some wind out of the sails of the herd. It is also likely to be replicated by other captive and non-captive floor plan providers. Do you think that maybe the captive finance companies have growing concerns about the herd’s stampede?