I don't know if all vendors received an email from CIT today, but mine was short and to the point. I guess our portfolio was not big enough. Can't say I am surprised. Maybe this letter was an easier pill to swallow than the one GM sent out to their dealers.
These unprecedented times in the financial markets have required CIT to evaluate each vendor relationship. We have implemented changes that temporarily will impact some of these relationships.
Continuing forward from this date, CIT will continue to process credit applications from your company only on active, existing CIT customers originated through your company. Active customers are those who are making payments today to CIT on transactions; not customers who have already returned or purchased equipment on previous transactions. You can use the attached rate card for upgrading existing customers. We will not process applications for your new customers.
Please note that CIT has modified our rate blending policy to be consistent with industry norms. Rate blending will begin when the new transaction cost exceeds 100% of the equipment MSRP. Also, when the cost exceeds 100% we may contact you to understand the components of your sale that drove the higher percentage. We require justification for any excess over MSRP in our investment. As a reminder, we will not knowingly finance transactions where inclusion of service in lease payments is undisclosed to us. CIT does not finance pre-paid maintenance as part of the equipment sale. Should you wish to include maintenance in the lease payment, we offer other options for doing so. Please contact me to discuss the best means of addressing this for your customers.
All active credit approvals for new and existing customers will be honored according to the terms of the original credit approval. To use the rate in effect at the time of the approval, you must fund the transaction no later than May 31, 2009. The previous rate blending calculation will apply to these earlier approvals. After May 31, the new rates and blending policy will apply.
The above policies will continue until further notice. It is our expectation to return to accepting your new customers when the economy and financial markets return to historic, stable conditions.
Thank you for the business and confidence you have shown in us. We will continue to be diligent in working with your CIT customer portfolio. Please contact me with any questions. You will find contact information on the rate card.
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