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GM Financial expands nonprime retail program to Canada

Published November 14, 2012

In April 2011, GM Financial delved into the Canadian market with the purchase of FinanciaLinx – one of the largest independent leasing companies in Canada. After 18 months, GM Financial Canada has made an impact in Canada's leasing space, and on Aug. 1 the team launched a nonprime retail program for GM dealers in Ontario.

According to Equifax Canada, 16 percent of Canadians with active credit have a bureau score of 679 or below, and are considered nonprime. Further, DealerTrack estimates that 600,000 nonprime consumers apply for an auto loan annually, but only 72,000 of those applications are funded. With the Canadian nonprime consumer market clearly in place, GM Financial recognized the need to develop a nonprime auto finance program for Canadian GM dealers looking to work with these consumers.

With the nonprime program, GM dealers now have a competitive advantage by being able to offer a financing option to the approximately 3.5 million Canadians with nonprime credit. "Nonprime is a new market, not just for us, but for all of Canada. With close to 20 percent of Canadians being in the nonprime bucket, GM Financial's retail product is a big addition to our arsenal of tools," said Marc J. Comeau, vice president of Vehicle Sales, Service & Marketing and director, General Motors of Canada. He continued, "It's happening at a time when used vehicles are in short supply. Typically the nonprime consumer would default to a used vehicle; now, this gives us the opportunity to put those consumers in new cars, which translates to higher new car sales for GM Canada."

Subvention support from General Motors makes it possible for GM Financial and the 460 GM dealers in Canada to offer customers an attractive interest rate for financing their next GM vehicle. The program enables dealers to attract consumers with a credit score under 680, plus the 84-month loan terms reflect the necessary flexibility that consumers are looking for considering Canada's current economic circumstances.

In preparation for the launch, Canadian operations beefed up their service areas and sent credit analysts and funding team members to the U.S. for training. "Our team members spent months going through the proper training in preparation for working with our GM dealers to help them assist their Canadian nonprime customers," said Howard Cobham, GM Financial Canada's senior vice president of Dealer Services. Now, Canadian operations have 17 dealer relationship managers, 15 credit analysts and 13 funding team members ready to assist dealers with structuring deals and getting them funded as quickly as possible.

The program is now available to all of English-speaking Canada, and will be available in French-speaking Canada later this year.

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