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UNITED STATES

FORM 10-K

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2004, or
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from              to             .

Commission file number: 1-3754

GENERAL MOTORS ACCEPTANCE CORPORATION

200 Renaissance Center

(313) 556-5000

Securities registered, pursuant to Section 12(b) of the Act, on the New York Stock Exchange:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]

As of December 31, 2004, there were outstanding 10 shares of the issuer’s $.10 par value common stock.

Documents incorporated by reference. None.

Reduced Disclosure Format

The registrant meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and is therefore filing this Form with the reduced disclosure format.

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* Item is omitted pursuant to the Reduced Disclosure Format, as set forth on the cover page of this filing.

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Item 1. Business

GMAC’s global activities include Financing, Mortgage and Insurance operations:

•	Financing — GMAC and its affiliated companies offer a wide variety of automotive financial services to and through General Motors and other automobile dealerships and to the customers of those dealerships. The Company also provides commercial financing and factoring services to businesses in other industries (e.g., manufacturing and apparel).
•	Mortgage — The Company’s Mortgage operations originate, purchase, service, sell and securitize residential and commercial mortgage loans and mortgage related products.
•	Insurance — GMAC’s Insurance operations insure and reinsure automobile service contracts, personal automobile insurance coverages (ranging from preferred to non-standard risk) and selected commercial insurance coverages.

Various subsidiaries of the Company are subject to regulatory, financial and other requirements of the jurisdictions in which they conduct business operations. These regulatory restrictions primarily dictate that these subsidiaries meet certain minimum capital requirements, restrict dividend distributions and may restrict certain assets. To date, compliance with these various regulations has not had a material effect on the Company’s consolidated financial condition, results of operations, or cash flows.

The Company had 33,700 and 32,205 employees worldwide as of December 31, 2004 and 2003, respectively. A description of the Company’s lines of business, along with the products and services offered and the market competition is contained in the individual business operations sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations, which begins on page 10.

Item 2. Properties

Item 3. Legal Proceedings

GMAC and its subsidiaries are named as defendants in a number of legal actions and from time to time are involved in governmental proceedings arising in connection with GMAC’s respective businesses. Some of the pending actions purport to be class actions. The Company establishes reserves for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts reserved for those claims. Based on information currently available, advice of counsel, available insurance coverage, and established reserves, it is the opinion of management that the eventual outcome of the actions against GMAC will not have a material adverse effect on the Company’s consolidated financial condition, results of operations, or cash flows. However, in the event of unexpected future developments, it is possible that the ultimate resolution of legal matters, if unfavorable, may be material to the Company’s consolidated financial condition, results of operations, or cash flows.

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

Item 6. Selected Financial Data

Refer to the Financial Highlights on page 7.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

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GMAC’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K are available on the Company’s internet website, free of charge, as soon as reasonably practicable after the reports are electronically filed with or furnished to the United States Securities and Exchange Commission (SEC). These reports are available at www.gmacfs.com, under Investment, Financial Statements, and SEC Filings.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

As discussed in Supplementary Financial Data – Summary of Consolidated Quarterly Earnings on page 95, GMAC has made certain adjustments to restate previously reported 2004 quarterly financial results. The adjustments did not impact GMAC’s 2004 annual results, financial condition as of December 31, 2004, or cash flows for the year ended December 31, 2004. While none of these adjustments were individually material to GMAC’s consolidated financial statements, the aggregation of these items, combined with other adjustments previously considered immaterial to GMAC’s quarterly operating results on a consolidated basis, has led to the decision by management and the GMAC Audit Committee to restate the quarterly information for each of the three quarters ended March 31, 2004, June 30, 2004 and September 30, 2004, from what had been previously reported.

In order to analyze the internal control considerations associated with the adjustments underlying the restatements, GMAC management evaluated (1) each adjustment as to whether it was caused by an internal control deficiency and (2) the effectiveness of actions that had been taken to remediate identified deficiencies. Certain of the adjustments were identified and corrected through internal control remediation that occurred in connection with GMAC’s Corporate Sarbanes-Oxley Section 404 program, while others were not related to deficiencies in internal controls. Management has concluded that the restatement of quarterly results was not the result of a material weakness in internal control that existed as of December 31, 2004.

Based on management’s evaluation, which disclosed no material weaknesses, GMAC’s Principal Executive and Principal Financial Officers each concluded that the Company’s disclosure controls and procedures are effective. There were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during the Company’s most recent fiscal quarter that may have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm thereon are set forth in Part II, Item 8 of the Annual Report on Form 10-K.

Item 9B. Other Information

Item 14. Principal Accountant Fees and Services

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The aggregate fees billed to the Company for professional services performed by Deloitte & Touche were as follows:

The services performed by Deloitte & Touche in 2004 were pre-approved in accordance with the pre-approval policy of the GM Audit Committee. This policy requires that during its first meeting of the fiscal year, the GM Audit Committee will be presented, for approval, a description of the Audit-Related, Tax and Other services expected to be performed by the principal accountant during the fiscal year. Any requests for such services in excess of $1 million not contemplated during the first meeting must be submitted to the GM Audit Committee for specific pre-approval. Requests for services less than $1 million must be pre-approved by the Chairman of the GM Audit Committee, and reported to the full Committee at its next regularly scheduled meeting. Proposed fees for Audit services are presented to the GM Audit Committee for approval in May each year.

The GM Audit Committee determined that all services provided by Deloitte & Touche during 2004 were compatible with maintaining their independence as principal accountants.

Item 15. Exhibits, Financial Statement Schedules

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	General Motors Acceptance Corporation
	(Registrant)
	/s/ ERIC A. FELDSTEIN
	________________________________________ Eric A. Feldstein
	Principal Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated, this 16th day of March, 2005.

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GMAC is a leading global financial services firm with over $320 billion of assets and operations in 41 countries. Founded in 1919 as a wholly-owned subsidiary of General Motors Corporation, GMAC was established to provide GM dealers with the automotive financing necessary for the dealers to acquire and maintain vehicle inventories and to provide retail customers the means by which to finance vehicle purchases through GM dealers. GMAC products and services have expanded beyond automotive financing and GMAC currently operates in three primary lines of business — Financing, Mortgage and Insurance operations. Refer to the separate business operations discussions in this MD&A for a description of the business activities and results of operations.

Operating Summary

GMAC earned a record $2.9 billion in 2004, up from the previous record of $2.8 billion earned in 2003, representing the 10th consecutive year of earnings growth. These record earnings were driven by solid results in each of GMAC’s three main lines of business. Record earnings were achieved in a difficult environment that included higher market interest rates, declining mortgage industry volume and a series of negative rating agency actions. Along with the earnings increase, GMAC continued to provide global support for the marketing of GM vehicles, as well as provided a significant source of cash flow to GM through the payment of a $1.5 billion dividend in the fourth quarter.

Despite unfavorable impacts from lower net interest margins, 2004 net income from Financing operations increased to $1,476 million, up from the $1,360 million earned in 2003. The increase reflects considerable improvement in earnings from International operations, lower credit loss provisions, improved vehicle remarketing results in North America and the impact of favorable tax settlements.

Mortgage operations earned $1,108 million, a decline of 12% from record earnings of $1,254 million earned in 2003 as U.S. residential mortgage industry volumes declined by approximately 30%. Despite the lower industry volumes, GMAC’s Mortgage operations experienced market share gains, asset growth, improved mortgage servicing results and an increase in fee-based revenue.

GMAC’s Insurance operations generated record net income of $329 million in 2004, up $150 million from the $179 million earned in 2003. The increase reflects a combination of strong results achieved through increased premium revenue, favorable loss experience, and improved investment portfolio performance.

As summarized in the Supplementary Financial Data appearing on page 95, GMAC’s quarterly earnings of $683 million in the fourth quarter of 2004 represent an increase of 8% from the $630 million earned in the final quarter of 2003. For the quarter, net income from Financing operations totaled $323 million, down from $342 million earned in the fourth quarter of 2003. Insurance operations had net income of $68 million in the fourth quarter of 2004, down from the $73 million earned in the same period the prior year, and Mortgage operations earned $292 million in the fourth quarter, up from the $215 million earned in the fourth quarter of 2003. The quarterly information presented in the Supplementary Financial Data has been restated to adjust for certain amounts that were recognized in the incorrect quarterly period during 2004. Please refer to the Summary of Consolidated Quarterly Earnings on page 95 in the supplementary section for more information regarding the adjustments to GMAC’s 2004 quarterly results.

Outlook

•	Funding and liquidity — GMAC’s ability to adequately fund the operations at attractive rates is a key component of the Company’s future profitability. During 2003 and 2004, the Company experienced a series of negative credit rating actions resulting in the downgrade of GMAC’s credit ratings to historically low levels. The negative actions were due primarily

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GMAC offers financing, mortgage and insurance products and services to customers throughout the world.

GMAC’s Financing operations offer a wide range of financial services and products (directly and indirectly) to retail automotive consumers, automotive dealerships, and other commercial businesses. The Company’s Financing operations is comprised of two separate reporting segments — North American Automotive Finance Operations and International Automotive Finance Operations and one operating segment — Commercial Finance Group. These products and services offered by GMAC’s Financing operations include the purchase of retail installment sales contracts and leases, extension of term loans, dealer floor plan financing and other lines of credit, fleet leasing, and factoring of receivables. In addition, GMAC’s Financing operations utilize asset securitization as a critical component of the Company’s diversified funding strategy. The Funding and Liquidity and the Off-balance Sheet Arrangements sections of this MD&A provide additional information about the securitization activities of GMAC’s Financing operations.

Consumer Automotive Financing

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The following table summarizes GMAC’s new vehicle consumer financing volume and the Company’s share of GM retail sales in markets where GMAC operates.

General Motors may elect to sponsor incentive programs (on both retail contracts and leases) by supporting financing rates below standard rates at which GMAC purchases retail contracts. Such marketing incentives are also referred to as rate support or subvention. General Motors pays the present value difference between the customer rate and GMAC’s standard rates either directly or indirectly to GM dealers. GMAC purchases these contracts at a discount, which is deferred and recognized as a yield adjustment over the life of the contract. GM may also provide incentives on leases by supporting residual values (established at lease inception) in excess of GMAC’s standard residual values and by reimbursing the Company to the extent vehicle remarketing proceeds are less than contract residuals. Such lease incentives are also referred to as residual support, as further discussed in the Residual Risk Management portion of the Financing operations section of this MD&A. The following table summarizes the percentage of the Company’s annual retail contract and lease volume that includes GM-sponsored rate and residual incentives.

The Company’s consumer financing volume and penetration levels are significantly impacted by the nature, timing, and extent of GM’s use of rate, residual and other financing incentives for marketing purposes on consumer retail contracts and leases. For example, GM began to aggressively use special rate financing incentives in the fourth quarter of 2001 in response to the economic conditions caused by the September 11 tragedy (through GM’s “Keep America Rolling” program). As a result, GMAC’s consumer automotive retail contract portfolio has increased 75% since September 2001. GM has regularly used rate subvention on retail contracts to market new vehicles in the United States. Late in 2004, GM reduced its use of special rate financing programs and introduced marketing programs that provide up-front cash incentives to customers that use GMAC to finance their purchase of a new GM vehicle. In addition, GM shifted a small portion of the marketing incentives back to residual incentives on consumer leases in 2004. As a result of these incentive programs, GMAC’s overall penetration levels for new vehicle consumer financings in 2004 remained consistent with that experienced in 2003, and continue to reflect traditionally strong levels.

Consumer Credit Approval

•	The consumer’s credit history, including any prior experience with GMAC,
•	The asset value of the vehicle and the amount of equity (down payment) in the vehicle, and
•	The term of the retail contract or lease.

GMAC uses a proprietary credit scoring system to support this credit approval process and to manage the credit quality of the portfolio. Credit scoring is used to differentiate credit applicants in terms of expected default rates, enabling the Company to better evaluate credit applications for approval and to tailor the pricing and financing structure based on this assessment of credit risk. The Company’s credit scoring models are periodically reviewed and updated based on historical information and current trends. However, these actions by management do not eliminate credit risk. Improper evaluations of contracts for purchase and changes in the applicant’s financial condition subsequent to approval could negatively affect the quality of the Company’s receivables portfolio, resulting in credit losses. As a part of the contract purchase process, the Company verifies that physical damage insurance is placed on the vehicle, and a security interest is established in the vehicle (for retail contracts), which further mitigates credit losses.

Servicing

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GMAC customers have the option to remit payments based on monthly billing statements, coupon books, or electronic funds transfers. Customer payments are processed by regional third-party processing centers that electronically transfer payment data to customers’ accounts. GMAC also utilizes regional customer service centers to handle customer questions or requests for changes of address, payoff quotes, copies of contracts and other requests.

Collection activity is typically initiated when a customer becomes 10 days past due. Accounts 10 days past due receive a reminder notice. When an account is approximately 15 days or more past due, but less than 48 days past due, a third-party collection service attempts to contact the customer and make payment arrangements. Once an account becomes 48 days past due, specialized collection centers within GMAC begin collection follow-up, with the objective of tracking the account more closely and making appropriate decisions regarding repossession of the vehicle.

During the collection process, GMAC may offer a payment extension to a customer experiencing temporary financial difficulty, enabling the customer to delay monthly payments for 30, 60, or 90 days, thereby deferring the maturity date of the contract by such period of delay. Extensions granted to a customer typically do not exceed 90 days in the aggregate over any twelve-month period or 180 days in aggregate over the life of the contract. If the customer’s financial difficulty is not temporary, and management believes the customer could continue to make payments at a lower payment amount, GMAC may offer to rewrite the remaining obligation, extending the term and lowering the monthly payment obligation. Extensions and rewrites are techniques that help mitigate financial loss in those cases where management believes that the customer will recover from financial difficulty and resume regularly scheduled payments, or can fulfill the obligation with lower payments over a longer period of time. Before offering an extension or rewrite, collection personnel evaluate and take into account the capacity of the customer to meet the revised payment terms. While the granting of an extension could delay the eventual charge-off of an account, typically GMAC will repossess and sell the related collateral, thereby mitigating the loss. As an indication of the effectiveness of GMAC’s consumer credit practices, of the population of accounts in the U.S. traditional retail finance portfolio as of December 31, 2001, which have subsequently been extended or rewritten, only 8% of the outstanding balance was subsequently charged off, through December 31, 2004. A three-year period was utilized for this analysis as this approximates the weighted average remaining term of the portfolio. As of December 31, 2004, less than 5.5% of active accounts had been granted an extension or were rewritten.

Subject to legal considerations, GMAC will normally begin repossession activity once an account becomes 90 days past due. Repossession may occur earlier than 90 days past due if management determines that the customer is unwilling to pay, the vehicle is in danger of being damaged, or hidden, or if the customer voluntarily surrenders the vehicle. Repossessions are handled by approved third-party repossession firms. Normally, the customer is given a period of time to redeem the vehicle by paying off the account or bringing the account current. If the vehicle is not redeemed, it is sold at auction. If the proceeds are not sufficient to cover the outstanding principal balance and any accrued interest, the resulting deficiency is charged-off. Regional asset recovery centers pursue collections on accounts that have been charged-off, including those accounts that have been repossessed and “skip” accounts where the vehicle cannot be located.

Consumer Credit Risk

The following tables summarize pertinent loss experience in the managed and on-balance sheet consumer automotive retail contract portfolio. In general, the credit quality of the off-balance sheet portfolio is representative of GMAC’s overall managed consumer automotive retail contract portfolio. However, the process of creating a pool of retail finance receivables for securitization or sale typically involves excluding retail contracts that are greater than 30 days delinquent at such time. In addition, the process involves selecting from a pool of receivables that are currently outstanding and, therefore, represent “seasoned” contracts. A seasoned portfolio that excludes delinquent contracts historically results in better credit performance in the managed portfolio than in the on-balance sheet portfolio of retail finance receivables. In addition, the current off-balance sheet transactions are comprised mainly of subvented rate retail finance receivables, which generally attract higher quality customers (or otherwise cash purchasers) than customers typically associated with non-subvented receivables.

The managed portfolio includes retail receivables held on-balance sheet for investment and receivables securitized and sold that the Company continues to service, but excludes securitized and sold finance receivables that GMAC continues to service but has no other continuing involvement (i.e., in which GMAC retains an

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interest or risk of loss in the underlying receivables). GMAC believes that the disclosure of the credit experience of the managed portfolio presents a more complete presentation of GMAC’s credit exposure because the managed basis reflects not only on-balance sheet receivables, but also securitized assets as to which GMAC retains a risk of loss in the underlying assets (typically in the form of a subordinated retained interest). Consistent with the presentation in the Consolidated Balance Sheet, retail contracts presented in the table represent the principal balance of the finance receivable discounted for any unearned rate support received from GM.

The following table summarizes pertinent delinquency experience in the consumer automotive retail contract portfolio.

In addition to the preceding loss and delinquency data, the following summarizes bankruptcies and repossession information for the United States traditional consumer automotive retail contract portfolio (which represents approximately 70% of the Company’s on-balance sheet consumer automotive retail contract portfolio):

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The Company’s allowance for credit losses is intended to cover management’s estimate of incurred losses in the portfolio (refer to the Critical Accounting Estimates section of this MD&A and Note 1 to the Consolidated Financial Statements for further discussion). The following table summarizes activity related to the consumer allowance for credit losses for GMAC’s Financing operations.

The Company’s consumer automotive leases are operating leases and exhibit different loss performance as compared to consumer automotive retail contracts. Credit losses on the operating lease portfolio are not as significant as losses on retail contracts because lease losses are limited to past due payments, late charges, and fees for excess mileage and excessive wear and tear. Since some of these fees are not assessed until the vehicle is returned, credit losses on the lease portfolio are correlated with lease termination volume. As further described in the Critical Accounting Estimates section of this MD&A, credit risk is considered within the overall depreciation rate and the resulting net carrying value of the operating lease asset. North American operating lease accounts past due over 30 days represented 1.59% and 1.69% of the total portfolio at December 31, 2004 and 2003, respectively.

Credit fundamentals in GMAC’s consumer automotive portfolio remain strong, with repossession activity and overall delinquency trends consistent with the prior year, and an improvement in loss severity. The decrease in severity is illustrated by a reduction in the average loss incurred per new vehicle repossessed in the United States traditional portfolio, which declined from $8,205 in 2003 to $7,993 in 2004. Delinquency trends in the North American portfolio have demonstrated a slight increase since 2003 as a result of a moderate weakening in the credit quality of the portfolio, as compared to recent years. Conversely, delinquency trends in the International portfolio have shown a significant improvement since 2003 as a result of a change in the mix of new and used retail contracts in the portfolio, as well as a significant improvement in the credit performance in certain countries. The decrease in 2004 charge-offs in the International portfolio is primarily due to a reduction in charge-offs from 2003 when certain retail contracts were charged-off as a result of a change in the charge-off policy in certain countries to more fully conform with U.S. practices. Overall, the credit quality of the consumer automotive retail portfolio remains strong, primarily due to the higher quality of contracts purchased since 2001 compared to historical experience. The increased volume of GM rate supported contracts has enhanced portfolio credit quality since, typically, rate subvented contracts have stronger credit characteristics than non-incentivized contracts, as the former involve buyers who were more likely to have paid cash for the vehicles, in the absence of the attractive financing rates.

The allowance for credit losses as a percentage of the total on-balance sheet consumer portfolio decreased from December 2003 primarily due to a change in reserve requirements for specific portions of the portfolio based on observed trends and a change in the mix of retail automotive finance contracts in the United States portfolio. During 2004, the amount of used retail contracts outstanding decreased in relation to the entire finance receivables portfolio. Typically, used retail contracts have an increased risk of loss, and in general, allowance levels are higher.

Lease Residual Risk

In a consumer lease, the Company assumes ownership of the vehicle from the dealer. Neither the consumer nor the dealer is responsible for the value of the vehicle at the time of lease maturity. Typically, the vehicle is returned to GMAC for remarketing. The following summarizes GMAC’s methods of vehicle sale in the United States at lease termination, stated as a percentage of total lease vehicle disposals.

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The Company primarily utilizes physical auctions and internet auctions in disposing of vehicles.

•	Physical auctions — GMAC disposes approximately half of its off-lease vehicles, not purchased at termination, through traditional official General Motors sponsored auctions. The Company is responsible for handling decisions at the auction, including arranging for inspections, authorizing repairs and reconditioning and determining whether bids received at auction should be accepted.
•	Internet auctions — The Company has offered off-lease vehicles to GM dealers and affiliates through a proprietary internet site (SmartAuction). The internet sales program was established in 2000 to increase the net sales proceeds on off-lease vehicles by reducing the time between vehicle return and ultimate disposition (reducing holding costs) and broadening the number of prospective buyers (maximizing proceeds). GMAC maintains the internet auction site, sets the pricing floors on vehicles, and administers the auction process. The Company earns a service fee for every sale. The internet sales program has increased significantly since inception and was the remarketing channel for nearly half of the 2004 off-lease vehicles disposed through auction in the United States.

GMAC bears the risk of loss to the extent that the value of the vehicle upon remarketing is below the residual value estimated at contract inception. GMAC primarily uses published residual guidebook values in establishing standard residual values at contract inception. These projected values may be upwardly adjusted as a marketing incentive if General Motors considers an above-market residual appropriate to encourage consumers to lease vehicles. Such residual support by GM results in a lower monthly lease payment by the consumer. General Motors reimburses GMAC for its portion of these increased residual values, to the extent remarketing sales proceeds are less than the contract residual at termination. In addition to the residual support arrangement, GM shares in residual risk on all off-lease vehicles sold at auction. GMAC and GM share a portion of the loss when resale proceeds fall below the standard residual values on vehicles sold at auction. GM reimburses GMAC for a portion of the difference between proceeds and the standard residual value (up to a specified limit).

Lease Residual Risk Management

•	Used vehicle market — The Company is at risk due to changes in used vehicle prices. General economic conditions, off-lease vehicle supply, and new vehicle market prices (of both GM and other manufacturers) most heavily influence used vehicle prices.
•	Initial residual value projections — As previously discussed, the Company establishes residual values at lease inception by consulting independently published guides. These values are projections of expected values in the future (typically between two and four years) based on current assumptions for the respective make and model. Actual realized values will likely differ.
•	GMAC’s remarketing abilities — GMAC’s ability to efficiently process and effectively market off-lease vehicles impacts the disposal costs and the proceeds realized from vehicle sales.
•	General Motors vehicle and marketing programs — GM influences lease residual results in the following ways:

	>	GM provides support to GMAC for certain residual deficiencies.
	>	The brand image and consumer preference of GM products impact residual risk, as the Company’s lease portfolio consists primarily of GM vehicles.
	>	GM marketing programs that may influence the used vehicle market for GM vehicles, through programs such as incentives on new vehicles, programs designed to encourage lessees to terminate their leases early in conjunction with the acquisition of a new GM vehicle (referred to as “pull ahead” programs), and special rate used vehicle programs.

The following table summarizes the volume of lease terminations and resulting income impact in the United States (which represents approximately 70% of the Company’s operating lease portfolio) for the years indicated.

GMAC’s off-lease vehicle remarketing results improved in 2004 as compared to the past few years primarily as a result of a decline in the volume of vehicles coming off-lease and the fact that the underlying contractual residual values (on the current portfolio) were lower than the residuals established on prior years’ volume. Additionally, GMAC has continued its aggressive use of the internet in disposing of off-lease vehicles. This initiative has improved efficiency, reduced costs, and ultimately increased the

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In recent years, the percentage of lease contracts terminated prior to the scheduled maturity date has increased primarily due to GM-sponsored “pull ahead” programs. Under these marketing programs, consumers are encouraged to terminate leases early in conjunction with the acquisition of a new GM vehicle. As part of this program, GMAC waives the customer’s remaining payment obligation and, under certain programs, GM compensates GMAC for the foregone revenue from the waived payments. Additionally, since these programs generally accelerate GMAC’s remarketing of the vehicle, the sale proceeds are typically higher than otherwise would have been realized had the vehicle been remarketed at lease contract maturity. The reimbursement from GM for the foregone revenue is, therefore, reduced by the amount of this benefit. The average remarketing gain per vehicle in the preceding table does not include the effect of payments related to the pull ahead programs.

Commercial Financing

Automotive Wholesale Dealer Financing

The following table summarizes GMAC’s wholesale financing of new vehicles and the Company’s share of GM sales to dealers in markets where GMAC operates.

GMAC’s wholesale financing continues to be the primary funding source for GM dealer inventories, as 2004 penetration levels remained relatively consistent with 2003 levels, and at historically high levels. In addition, GMAC’s portfolio of wholesale receivables outstanding increased due to a higher amount of dealer inventories outstanding as compared to December 31, 2003. The decrease in the Company’s share of GM sales to dealers for the International portfolio is primarily due to GMAC’s consolidation of Banco GM’s financing operations beginning in 2004, which has a comparably lower level of financings as a percentage of GM sales to dealers than other countries.

Credit Approval

•	Reviews credit reports, financial statements, and may obtain bank references,
•	Evaluates the dealer’s marketing capabilities,
•	Evaluates the dealer’s financial condition, and
•	Assesses the dealer’s operations and management.

Based on this analysis, the Company may approve the issuance of a credit line and determine the appropriate size. The credit lines represent guidelines, not limits, which dealers may exceed on occasion, an example being a dealer exceeding sales targets contemplated in the credit approval process. Generally, the size of the credit line is intended to be an amount sufficient to finance a 60-90 day supply of new vehicles and a 30-60 day supply of used vehicles.

Servicing and Monitoring

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A statement setting forth billing and account information is prepared by GMAC and distributed on a monthly basis to each dealer. Interest and other non-principal charges are billed in arrears and are required to be paid immediately upon receipt of the monthly billing statement. Dealers remit payments directly to a GMAC office, typically within geographic proximity to the dealer.

Dealers are assigned a credit category based on various factors, including capital sufficiency, financial outlook, and credit history. The credit category impacts the amount of the line of credit, the determination of further advances, and the management of the account. GMAC monitors the level of borrowing under each dealer’s account daily. When a dealer’s balance exceeds the credit line, GMAC may temporarily suspend the granting of additional credit or increase the dealer’s credit line, following evaluation and analysis of the dealer’s financial condition and the cause of the excess.

GMAC personnel periodically inspect and verify the existence of dealer vehicle inventories. The timing of the verifications varies and no advance notice is given to the dealer. Among other things, verifications are intended to determine dealer compliance with the financing agreement and confirm the status of GMAC’s collateral.

Other Commercial Financing

•	Automotive dealer term loans — The Company makes loans to dealers to finance other aspects of the dealership business. These loans are typically secured by real estate, other dealership assets and occasionally the personal guarantees of the individual owner of the dealership.
•	Automotive fleet financing — Dealers, their affiliates and other companies may obtain financing to buy vehicles, which they lease or rent to others. These transactions represent GMAC’s fleet financing activities. GMAC generally has a security interest in these vehicles and in the rental payments. However, competitive factors may occasionally limit the security interest in this collateral. As of January 1, 2002, General Motors terminated programs in which GM provided a limited payment guarantee to GMAC and other lenders as consideration for providing fleet financing. Volume acquired prior to 2002 continues to be covered under the payment guarantee. At December 31, 2004, less than 1 percent of GMAC’s fleet financing receivables were covered by the General Motors payment guarantee program.
•	Full service leasing — GMAC offers full service individual and fleet leasing products in Europe, Mexico and Australia. In addition to financing the vehicles, the Company offers maintenance, fleet, and accident management services, as well as fuel programs, short-term vehicle rental, and title and licensing services.
•	Specialty lending — Through its Commercial Finance Group, the Company provides asset-based lending, equipment finance, structured finance and factoring services in the United States, United Kingdom and Canada to companies in the apparel, textile, automotive supplier and other industries.

Commercial Credit Risk

Credit risk is managed and guided by policies and procedures that are designed to ensure that risks are accurately assessed, properly approved and continuously monitored. Individual business units approve significant transactions and are responsible for credit risk assessments (including the evaluation of the adequacy of the collateral). Individual business units also monitor the credit risk profile of individual borrowers and the aggregate portfolio of borrowers — either within a designated geographic region or a particular product or industry segment. Corporate approval is required for transactions exceeding business unit approval limits. Credit risk monitoring is supplemented at the corporate portfolio level through a periodic review performed by the Company’s Chief Credit Officer.

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To date, the only commercial receivables that have been securitized have been wholesale lines of credit extended to automotive dealerships, which historically experience low losses. Since only wholesale accounts have historically been securitized, the amount of losses on GMAC’s managed portfolio is substantially the same as the on-balance sheet portfolio. As a result, only the on-balance sheet commercial portfolio credit experience is presented in the following table:

Net losses on the wholesale portfolio in 2004 remained at traditionally low levels (2002 results include a $20 million recovery of a wholesale loss that was charged-off in a prior year). Charge-offs in the commercial portfolio decreased as compared to 2003 resulting from a lower amount of charge-offs at the Company’s Commercial Finance Group (included in other commercial financing in the preceding table). Certain loans in the portfolio that were determined to be uncollectible were charged-off in 2003 and previously provided for in 2002. The decrease in allowance coverage for commercial credit losses is consistent with the lower level of charge-offs and a lower amount of loans specifically identified as impaired. In addition, the coverage ratio was impacted by an overall increase in wholesale receivables due to higher dealer inventories as compared to December 31, 2003.

The Company’s allowance for credit losses is intended to cover management’s estimate of incurred losses in the portfolio (refer to the Critical Accounting Estimates section of this MD&A and Note 1 to the Consolidated Financial Statements for further discussion). The following table summarizes activity related to the commercial allowance for credit losses for GMAC’s Financing operations.

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Results of Operations