You’ve probably seen all of those TV ads promoting the new Ally bank, the bank named to evoke a warm and fuzzy, we’re-on-your-side feeling – and if you’re like the average consumer, you assumed that Ally was just another commercial banking brand arising naturally to compete with the likes of Wells and others. But that’s not even close to the whole story.
Wall Street Journal articles going back over the past few years have chronicled the presto-chango process that independent blogs have called “alchemy,” revealing that Ally Bank is actually a new name for…drumroll, please….GMAC! Yes, GMAC, and if that acronym doesn’t mean anything to you now, it will when you shop for your new General Motors car or truck.
That’s because GMAC stands for the General Motors Acceptance Corporation, the financing arm of the auto maker for years. Now, all that is changed: the WSJ covered GMAC’s “application” to the government to become a commercial bank, and its subsequent name change in 2010. Now, some who take out loans and deal with this ‘new’ bank may not understand that they are dealing with a company that has participated in round after round of bailouts, while sometimes teetering precipitously close to bankruptcy.
General Motors seems to be weathering the storm these days – but it still seems a little unfair not to more aggressively disclose the switch to the public. For those who are financing cars through this company, it’s a good idea to get a few details straight before signing a GM auto financing deal. First, ask participating dealerships about “factory-direct” offers. Then contact General Motors directly through their web site or other contacts to get up to date info on interest rates, incentives and anything else that GM offers new customers. It’s also a good idea to beef up your credit score, amass a big down payment, and seek third party lender pre-qualification before you go shopping. With these points in your favor, it’s harder for GM dealers to edge you toward higher interest rates and more debt over time. You’ll also know more about who you are borrowing from – which might be important down the line.