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, [phone]; Jim Farmer of 
GMAC, [phone]; or Mark Tanner of General Motors, [phone]/ 
    /Web site:  http://media.gm.com  
                http://www.gm.com / 
    (GM)