Since successfully piloting a new GM prime lease program in Ohio last December, the company has expanded the lease offering into 15 additional states — with eight states added last week. The goal now is to expand the program nationwide by this summer.

“We have been, historically, a subprime retail installment lender,” said Caitlin DeYoung, spokesperson for GM Financial. “When we were acquired by GM, the purpose was to fill in the financing gaps. Our main focus was to get a leasing program out and prime leasing was the first priority.”

Aside from Ohio, the prime lease program is now available in Connecticut, Delaware, Indiana, Kentucky, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia and West Virginia. reported F&I and Showroom.

Officials said the company also is eyeing a return to the Canadian market by the middle of the year or sooner, and has rehired Howard Cobham, its former Canadian auto finance executive, to lead that effort. His first order of business will be to roll out the prime leasing program in that market.

DeYoung said the company also is considering an expansion of its lease offerings to customers downstream on the credit spectrum. The company spokeswoman said that won’t happen until the prime program is rolled out nationally.

As for retail installment contracts, DeYoung said originations will outpace what AmeriCredit did last year, but would not offer a target increase. She added that although GM Financial is being positioned to help GM dealers, the former independent finance company will continue to serve non-GM dealers under the AmeriCredit banner.

“We are building out different products for GM dealers, but we have not stated what our target is on originations. It’ll definitely be an increase from the prior year,” DeYoung said. “Our current infrastructure is not built to take on 80 percent of GM’s business and we’re not looking to do that. What we are looking to do is provide a competitive financing option for GM dealers.”

The two top executives for GM Financial, Dan Berce, and Ally Financial Inc., Tim Russi, underscored this goal earlier this month in San Francisco at the American Financial Services Association’s 2011 Vehicle Finance Conference and Exposition, when they appeared together for the event’s annual CEO panel.

Russi talked about the benefits of Ally’s bank-holding status, saying that the company has been able to diversify its sources of funding. He also talked about the company’s recent successes in the securitization market, and acknowledged that the company must continue to mend dealer relationships that were strained during the downturn.

Berce described to the packed audience how AmeriCredit went from the brink of collapse in the spring of 2008 to survival in early 2009. And after describing the moment he learned GM was interested in purchasing the company, he fielded a question from the audience on whether his company and Ally Financial could coexist.

“GM bought us not to be the new GMAC; they bought us to plug the gaps,” Berce responded. “They bought us to bring back leasing.”

GM executives are weighing the idea of a new approach to Ally Financial, the renamed GMAC, to give the auto maker’s dealers better access to wholesale credit, reported The Wall Street Journal.

Six months ago Ally turned down GM’s $5 billion offer for its wholesale business.

Instead, GM purchased Americredit Corp. for $3.5 billion but that lender, now part of GM Financial, is primarily in subprime consumer financing.

So far, GM hasn’t approached Ally Financial about the potential for a purchase, and there is no indication whether the lender would be open to a proposal, the people familiar with the situation said.

The U.S. government—which owns 74 percent of Ally and 26.5 percent of GM—could play a role in any such arrangement, the people said.

Ally ended up needing a government bailout after its mortgage business suffered major losses; its car-financing business remained relatively solid.

Ally and the Treasury declined to comment.

GM, far more than its rivals, depends on outside banks for the majority of its consumer lending and dealer financing. That leaves GM more dependent and exposed to risk than competitors that are able to use their in-house lenders to bolster sales in tough times.

In 2008, a move by Ally, then called GMAC, to dramatically restrict leasing amid the U.S. financial crisis helped trigger the spiral that sent GM into bankruptcy in 2009.

Ally, which received $17.2 billion in U.S. bailout funds, is readying an initial public offering for as soon as this year in which the Treasury would sell its stake in the bank. Investors will likely seek clarity on Ally’s relationship with GM and the future of its auto loan business before the company returns to the public markets.

GM Chief Executive Daniel Akerson, a former private equity deal maker, is in favor of a renewed approach to Ally, according to one of the people.

Dealers, who pay for cars and trucks when they arrive in showrooms, use wholesale credit to finance that inventory. If dealers are unable to access credit or are forced to pay high rates, they risk being unable to obtain vehicles.

GM executives want to expand its in-house lending business so the company is less vulnerable to market fluctuations, these people said.

In a downturn, “we might be exposed” to the risk of not having enough wholesale financing for dealers, GM finance chief Chris Liddell said in an interview Monday at the Detroit auto show. “It’s critical we have credit flowing in those times.”

While Mr. Liddell said he is reluctant to take a step back into the business of being a full-line lender he would consider a smaller approach.

“I am philosophically against having a $100 billion finance company attached to a $50 billion to $60 billion car company,” he said. “In a [market] downturn, we might be exposed. It’s critical we have credit flowing through those times.”

AmeriCredit, over which GM has total control, has around $10 billion in assets. Mr. Liddell said AmeriCredit could grow to around $15 billion, but not more. The captive lenders at Ford Motor Co. and Toyota Motor Corp. have assets of $108 billion and $84 billion, respectively.

“Returning to captive financing is likely a prerequisite for maintaining U.S. market share over 20 percent longer term,” Morgan Stanley analyst Adam Jonas wrote in a recent research note. “While impossible to quantify, we believe GM is ceding hundreds of basis points of U.S. market share to competitors with integrated finance operations.”

A plan to buy back the former GMAC auto lending business could have significant hurdles. Ally Chief Executive Michael A. Carpenter shot down GM’s earlier offer for its wholesale-lending operation.

Ally, under Mr. Carpenter, has made it a goal to increase the company’s auto loan operation, which also is the primary lender for Chrysler LLC.

Contention between former GM CEO Edward E. Whitacre Jr. and Mr. Carpenter further complicated the auto maker’s efforts to cut a deal with Ally. The relationship between the two companies could be different with GM’s new CEO, Mr. Akerson.

This follows the transition of the corporate entity to Ally Financial Inc. in May. The rebranding of the auto finance operations in these markets will take effect in August.

The Ally brand will be used for auto financing activities in the three North American markets, including activities to support the following manufacturers: General Motors, Chrysler, Saab, Thor Industries and FIAT Mexico.

“The move to the Ally name allows us to invest in a brand that we own and can build upon for the long term,” said Ally President Bill Muir. “An ally is someone you rely on to support you, and our new brand embodies our 90-year heritage as a trusted finance source for the automotive industry.”

In connection with the rebranding, Ally will be making a series of enhancements to the customer experience beginning with:

Simplifying and streamlining consumer materials and online services to offer a more straightforward approach to auto financing

Investing in enhancements to the customer service process

Offering financial tools to simplify the payment calculation process

Providing opportunities to co-brand and customize certain consumer materials with information from the manufacturer and the dealer

“While our name has changed, our primary focus and core business continues to be automotive financial services,” said Muir. “Our dealer customers and auto partners can count on our ongoing commitment to their success.”

As one of the largest automotive finance companies in the world, Ally extended more than $16 billion of credit to retail customers in the first half of 2010 in the U.S., Canada and Mexico, which represents an increase in originations of more than 120 percent from the first half of 2009. For the first six months of 2010, the company extended an average of approximately $2 billion of credit per month to consumers in the U.S.

Chris Liddell, chief financial officer of General Motors, said: “As we enter an exciting new chapter in GM’s history, Ally remains an important partner and auto financing provider for GM customers. We look forward to continuing that relationship.”

Richard Palmer, CFO of Chrysler Group LLC, added: “In taking over the financing of so many Chrysler dealers in such a short time Ally has shown itself to be a strong partner for Chrysler and our dealership network. Ally has proven to be a trusted and reliable source of financing with an in-depth knowledge of the auto industry.”

The company’s U.S.-based auto finance products and services will transition from GMAC to Ally Financial on Aug. 23. The auto finance operations in Mexico and Canada will adopt the name Ally Credit on Aug. 16 and Aug. 23, respectively. There will be no change to current customer accounts or billing cycles. Ally’s auto financing operations outside of North America will continue to operate under the GMAC brand as options for further use of the brand are evaluated.

GMAC was named the official preferred retail financial services provider for Thor in April. It will initially offer financing through RV dealers in Alabama, California, Colorado, Florida, Georgia, Maryland, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Washington, expanding nationwide by year-end to all qualified dealers in Thor’s U.S. network.

Thor is the world’s largest manufacturer of recreation vehicles, including brands such as Damon, Four Winds, Airstream, Dutchmen, Komfort, Breckenridge, CrossRoads and Keystone RV.

“We are very pleased with the relationships we’re developing with Thor dealers since the announcement, and our systems are now ready for business in the RV market,” said Tim Russi, executive vice president of GMAC North American Operations. “The RV business has been recovering steadily with improvements in the economy, and we are committed to supporting RV dealers in their sales efforts.”

“Thor is very excited to bring this new preferred relationship with GMAC to our Thor dealers,” said Ron Fenech, group president of Thor RVs. “Retail financing is a vital part of the RV business and GMAC brings credibility and resources that will benefit our entire industry.”

GM may buy back the GMAC business, start a new finance unit or form a partnership with banks and other lenders, said the people, who asked not to be identified because details are private. Chief Executive Officer Ed Whitacre wants to form an in-house lender before selling shares in GM as soon as the fourth quarter, one person said.

Having a so-called captive credit arm may boost GM’s profit, enable dealers to offer better terms on leases and loans, and make an initial public offering more appealing to investors, said Rebecca Lindland, an IHS Global Insight analyst in Lexington, Mass.

“The IPO is going to be more of a success if they can sell more vehicles than they have been selling,” Lindland said. “They should be able to do that if they can be more aggressive in their financing. Having their own finance company would certainly help.”

Whitacre has his management team exploring all options, the people said. Tom Wilkinson, a GM spokesman, declined to comment.

GMAC is now known as Ally Financial Inc. and is 56 percent owned by the U.S. Treasury after an injection of $17.2 billion under the Troubled Asset Relief Program.

Meg Reilly, a Treasury Department spokeswoman, had no immediate comment, and Ally’s Gina Proia said an acquisition of its auto-finance business by GM was “speculation.”

“The company has marked a number of significant accomplishments so far this year,” said Ally CEO Michael A. Carpenter. “As we begin the next chapter under the Ally Financial brand, we will continue our progress in executing our strategic objectives and remain focused on our commitment to customers.”

Carpenter continued: “Our customers are critical to our success, and we believe the Ally brand represents our goal to deliver competitive products and excellent service to all of our customers as we take the next steps in building on our 91-year history.”

The Ally brand was first introduced at Ally Bank in May 2009 and is now adopted at the parent company. There will be no change to the branding of the company’s operating units at this time. Options to use the Ally brand more broadly within the company are currently being evaluated; however, decisions have not been finalized.

Yastine, 50, is a top prospect because she’s worked before at Citigroup with Michael Carpenter, GMAC’s new CEO, said the people. They declined to be identified because the search is confidential. Detroit-based GMAC is looking for someone to replace James Mackey, the interim CFO since Robert Hull left in March for a private-equity firm.

The process was still winding down as of early this week, according to one person. Gina Proia, a GMAC spokeswoman, declined to comment, and efforts to reach Yastine weren’t successful.

The new finance chief will help Carpenter devise an exit from government bailout programs, which funneled more than $17 billion to the lender and gave the U.S. a 56 percent stake. Carpenter reported the company’s first operating profit since 2007 earlier this week, following an annual loss last year that exceeded $10 billion.

Yastine has been a consultant to Southgate Alternative Investments, the investment firm founded by Carpenter, 63, according to the firm’s Web site. She served as CFO of New York- based Citigroup’s investment bank from 2000 to 2002 when Carpenter ran the business and later was finance chief from 2002 to 2004 at Credit Suisse’s investment bank, the Web site said.

Hull left at the end of March to join Providence Equity Partners, the Rhode Island-based investment firm. He joined GMAC in 2007 from Bank of America Corp., the former employer of Al de Molina, who was replaced by Carpenter as CEO in November.

Yastine attended New York University, where she received an undergraduate degree in journalism and a master’s degree in business administration, according to a 2002 Credit Suisse statement.

Carpenter said during a May 3 conference call that he’d be meeting this week with regulators about how to pay back the U.S., using a combination of tactics that may include an initial public offering. The Congressional Oversight Panel said in March the Treasury should require GMAC “to lay out a clear path to viability or a strategy for fully repaying taxpayers.”

Next week GMAC is changing its corporate name to Ally Financial Inc., but its auto unit will continue to do business under the GMAC name.

GMAC’s preferred lender agreement with Spyker takes effect immediately and calls for GMAC to supply dealers with inventory financing and retail auto loans. Auto leasing is excluded from the arrangement, though GMAC is considering offering leases in some markets, GMAC spokesman Tony Sapienza said.

GMAC already provided retail financing through all the Saab dealers and has provided inventory financing to a majority of them, Sapienza said. The dealers can continue to operate under their existing lending agreements with GMAC, he said.

“We’ve had a long-term relationship with these dealers when they were a part of GM,” Sapienza said. “It’s an easy transition.”

Earlier this month, the Congressional Oversight Panel suggested breaking apart GMAC, which is surviving on $17 billion in federal funding, and returning control of its auto-lending business to GM. The panel said GMAC has failed to establish a viable business plan to repay taxpayer dollars.

The idea appealed to GM, in part because auto maker would have more control over lending practices. GMAC’s move in 2008 to dramatically restrict leasing amid the U.S. financial crisis helped trigger the spiral that sent GM into bankruptcy the last year.

GM over the last two years suffered more severe sales declines in the U.S. than Detroit rival Ford Motor Co. and continues to offer only a limited number of leases. Late last year, roughly 2% of GM’s sales were through leases, down from a more typical 20%.

Having control of GMAC’s auto business also could make GM more attractive on Wall Street as the company seeks to launch an initial public offering as soon as this year. Ford, Honda Motor Co. and Toyota Motor Corp. all have so-called captive auto lenders. In that regard, GMAC could be considered a key strategic advantage.

But taking over GMAC would have many complications. GM sold a majority stake in GMAC in 2006 as a way to buck up the auto maker’s credit standing and its access to capital. As it turned out, GM still remains largely cut off from the markets.

Meantime, GMAC is wrestling with its own complicated restructuring. The lender continues to struggle with deep losses at its mortgage arm, which lost $8.3 billion last year. A key part of the aid GMAC got from the U.S. was the ability to turn itself into a bank-holding company.

The company is using new access to low-cost capital and growth of its Ally bank to compete more directly with banks such as J.P. Morgan Chase & Co. and Wachovia Corp.

GMAC a year ago took over for Chrysler Financial as the preferred lender for Chrysler Group LLC, now controlled by Italian car maker Fiat SpA. GMAC is looking to win business other auto makers and recently agreed to work with Saab, recently split from GM.

The sale is one of a series of transactions indicating that GMAC has improved its access to capital in the past six months after having to rely on repeated cash infusions from the U.S. Treasury Department to stay afloat during the credit crisis.

Treasury owns 56 percent of GMAC after investing $17.2 billion in the company.

When the latest transaction is complete, GMAC will have raised $7.1 billion since September through the sale of securities and bonds.

This week’s sale represents the first time that GMAC unit Ally Bank has sold securities outside of a government-sponsored program. Ally Bank’s previous three transactions in September, November and February used a federal program designed to free up credit markets by providing financial aid to investors.

Last week, GMAC raised $1.5 billion through a bond issue — the second this year. And in February, GMAC raised $2 billion through a bond issue, the first time the lender was able to access the capital markets since May 2007.

GMAC CEO Michael Carpenter said the bond issue was a major step toward profitability. Several recent ratings upgrades have lowered GMAC’s cost of capital, he explained in an interview after the February transaction.

Said Carpenter: “Over time, the cost savings is very substantial. …On a more than $150 billion balance sheet, some large percentage is financed by debt. You get to some big numbers quickly.”

Carpenter said GMAC would seek new partnerships with automakers beyond General Motors and Chrysler once its access to capital improves.

GMAC just entered an agreement with Spyker Cars N.V. to provide retail and inventory financing to Saab’s global network of 500 dealers. Spyker recently bought Saab Automobile from GM, and the arrangement continues the lending relationships most of the dealers had with GMAC when GM owned Saab.