General Motors Corporation and Subsidiaries - Page 17




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          customer's purchase price of the vehicle even though the RISC                
          carried a below-market interest rate (i.e., the RISC's fair                  
          market value at the time of purchase was less than its face value            
          at the time of issuance).  If the participating independent GM               
          dealer offered to assign the RISC to GMAC and GMAC accepted the              
          RISC, GMAC paid or credited the independent GM dealer an amount              
          equal to the face value of the RISC (which was greater than the              
          RISC's fair market value at the time of purchase).9                          
               4.  The Retail Rate Support Payment                                     
               When GMAC acquired a retail customer's RISC carrying a                  
          below-market interest rate (i.e., a rate-supported RISC) from an             
          independent GM dealer, GM paid (or credited to) GMAC an amount               
          (the retail rate support payment) equal to the difference between            
          the face amount of the RISC and the fair market value discounted             
          at GMAC's buy rate.10  GM paid GMAC the rate support payment to              




               9  GMAC never paid an independent GM dealer more than the               
          fair market value for an RISC in the absence of a retail rate                
          support program because GMAC's margin for profit on an individual            
          RISC was very small.  If GMAC paid more than the fair market                 
          value for an RISC without receiving a retail rate support                    
          payment, GMAC would have experienced a loss on the RISC (i.e.,               
          the expenses would have exceeded the income on the RISC).                    
               10  The retail rate support payment GM made to GMAC                     
          represented the difference between the amount GMAC paid the                  
          independent GM dealer for the RISC under a retail rate support               
          program and the amount GMAC would have paid the independent GM               
          dealer for the RISC in the absence of such a program.                        





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