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Originally Posted by beerme1  Excellent advice!!
I appreciate your info and wonder though if they are fully insured by GMAC wouldn't that negate the risk? |
Well, the WSJ just ran an article criticizing Cerberus Capital (the firm that bought 51% of GMAC) for the performance of GMAC and Chrysler as investments.
From the WSJ:
"In the third quarter of 2007, GMAC posted its largest quarterly loss in its 88-year history because of a $2.3 billion loss at Residential Capital LLC, its home-lending unit known as ResCap. Investors and analysts said Cerberus and General Motors Corp., which still owns 49% of GMAC, might have to inject more capital to keep ResCap afloat. A large provider of subprime loans, ResCap is the second-largest independent U.S. mortgage lender."
Having said that, even if GMAC were to fail, somebody would presumably buy up the insurance policies. I would worry less about GMAC's solvency than I would about whether an extended warranty makes financial sense.