Community Forums

Lukeaa · 12-07-2008, 08:07 AM

I currently have GMAC insurance on my coach. I am beginning to have serious doubts about GM making it. Should I be looking for a new insurer and if so, who do you recommend?

Luke

Lukeaa · 12-07-2008, 08:07 AM

I currently have GMAC insurance on my coach. I am beginning to have serious doubts about GM making it. Should I be looking for a new insurer and if so, who do you recommend?

Luke

Route 66 · 12-07-2008, 08:28 AM

It never hurts to compare insurance prices.

Try FARM & CITY INSURANCE.

I recommend them.

Lindsay Richards · 12-09-2008, 02:41 PM

I too have GMAC (through Good Sam), but was questioning whether or not the failure of GM would close them down. I would assume they are a different business unit and any bankruptcy judge would not close down a successful division. I feel pretty sure that Good Sam has a handle of this situation and would be informing us of any upcoming changes. Maybe an expert on the forum could give us some advise.

Lukeaa · 12-10-2008, 09:30 AM

This is why I am worried:

NEW YORK (Reuters) – Auto and mortgage lender GMAC said on Wednesday that only a fraction of its bondholders agreed to swap their debt, raising doubts over the company's bid to become a bank holding company and stay solvent.

GMAC, owned by private equity firm Cerberus (CBS.UL) as well as General Motors Corp (GM.N), said it would give bondholders until December 12 to exchange their debt under more favorable terms -- the third time it has extended the date.

GMAC is looking to swap $38 billion of outstanding debt for a smaller amount of new debt, as well as preferred shares and cash, in an effort to raise the capital it needs to qualify as a bank and reduce debt load.

As a bank, GMAC would be eligible for government support including guarantees of new debt that it issues. The company could also apply for billions of dollars of capital under the United States' $700 billion Troubled Asset Relief Program.

GMAC said that so far, investors holding about $6.3 billion of its debt, or about 22 percent of eligible bonds, have agreed to swap their securities. For the company's Residential Capital mortgage unit, holders of about $2.0 billion, or 21 percent, of outstanding notes have agreed. Investors can exchange debt later under less favorable terms.

In both cases, those amounts are well short of the 75 percent approval GMAC needs for the exchange to go through. A successful exchange would help GMAC raise the $30 billion of regulatory capital required for it to become a bank.

GMAC said last month that without bank holding company status, it would likely have to sell assets and take other extraordinary measures to make good on its obligations.

"If GMAC is unable to successfully convert to a bank holding company and complete the GMAC and ResCap offers by December 31, 2008, it would have a near-term material adverse effect on GMAC's business, results of operations, and financial position," the company said in a statement on Wednesday.

But analysts said the company's survival is at stake. If the company does not become a bank, it risks violating the terms of its lending agreements, or covenants.

"If they don't get a waiver on those covenants, they probably don't have any alternative to filing for bankruptcy protection," said Sean Egan, managing director at ratings agency Egan-Jones Ratings Co.

GMAC, which has been the primary lender to GM customers but has curbed loans to borrowers who do not have good credit, lost $2.52 billion in the third quarter, its fifth straight quarterly loss.

Tom N · 12-10-2008, 11:20 AM

Wow!

I held some GMAC BBB SMARTNOTES 4 years ago but they matured.

I also held some Ford Motor Co. paper that was BBB.

At the time they looked like secure investments but the ratings were BBB.

GMAC still gives me a discount for holding their paper.

-Tom

Lukeaa · 12-10-2008, 02:16 PM

I changed my insurance from GMAC to Progressive. Somewhat more expensive, but it covers me in Mexico.

Corvette Man · 12-11-2008, 04:42 AM

Progressive had the best rates for me in NC. They beat GMAC and Good Sams by several hundred dollars. Just renewed for another year.

Lindsay Richards · 12-14-2008, 09:35 AM

Whoops, I think you are right. I am paid up through 07/01/09 and wonder if they will make it. I guess I can only wait and see what happens. I have had them for years and only had a small claim. (Two windshield chips from Quartzite area). They sent out a guy who fixed them for free with that super dooper stuff that keeps the chip from growing. Very easy to deal with and I would hate to see them go under.