GM Grabs $2 Billion Windfall as Used-Car Prices Hit Record

(Bloomberg) -- There's a big upside to record used-car prices: Auto lenders like GM Financial are cashing in.

General Motors Co.'s lending unit booked a $2 billion gain last year reselling the vehicles that came back from expired leases and anything the company repossessed, according to a regulatory filing Wednesday. That helped GM Financial to nearly double its annual profit to $5 billion, allowing it to pay a $3.5 billion dividend back to the automaker.

Shares in GM were little changed at 9:45 a.m. in New York, erasing premarket gains, after the company detailed financial results late Tuesday and said that the semiconductor shortage is beginning to ease up. The stock fell 7.8% this year through Tuesday's close, worse than the 4.6% decline in the S&P 500 index.

Read more: GM sees high costs, shift to budget cars capping profit

The used-car boom won't last forever, GM said. The company expects prices to come down a bit, which will lower GM Financial's profit for 2022 to between $3.5 billion to $4 billion, GM Chief Financial Officer Paul Jacobson said on a call with analysts. That's still a big benefit considering GM expects to make $13 billion to $15 billion in earnings before interest and taxes this year.

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