GMAC Says It May Halt Financing to Some GM Dealers

GMAC LLC, the lender partly owned by General Motors Corp., is telling some GM dealers it will no longer provide them with financing to buy vehicles because of its own reduced funding, according to letters sent to the retailers.

Some dealers also are being told that they will have to start repaying such loans after vehicles have been on lots for at least 180 days, according to one of the three letters. Gina Proia, a GMAC spokeswoman, yesterday declined to confirm them.

Hundreds of the retailers may have received such letters in recent weeks, Denny Fitzpatrick, chairman of the California New Car Dealers Association, said in an interview. The Detroit-based automaker has about 6,500 U.S. dealerships.

“Turbulence in the markets reduced our access to funds and increased the cost of funds where available,'' GMAC Chief Executive Officer Al de Molina said in a letter sent Oct. 21 to the California group. “In response, we adjusted our credit policy to reflect the reduced level of funding availability.''