General Motors Co. has decided against creating its own finance unit and is instead talking with banks including JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. about bolstering its lending capabilities, people with direct knowledge of the decision said.

The banks would write loans and leases on cars, helping to spur sales, said four people with knowledge of the situation. They asked not to be named because the discussions are private.

Chief Executive Ed Whitacre aimed to get the automaker back into financing before its planned initial public offering this year, people familiar with the situation have said. The company considered buying back its former lending arm, GMAC LLC, starting a bank or working with outside lenders to offer customers more financing options, said three people with knowledge of the discussions. Buying GMAC, now called Ally Financial Inc., or starting a new, in-house banking unit proved too difficult at this point, they said.

"They have to make sure they cover all of the credit tiers," said Maryann Keller, president of the consultant Maryann Keller & Associates in Stamford, Conn. "They can't reacquire GMAC because its only basis for cheap capital is that they own a bank. GM can't legally own a bank."

Selim Bingol, a GM spokesman, and Gina Proia, an Ally spokeswoman, declined to comment.

GM, of Detroit, is looking for other banks to boost its subprime-lending and leasing capabilities, the people said. GM has missed out on some sales because GMAC, its primary retail lender, doesn't lend to subprime borrowers, Mark Reuss, president of GM North America, has said.

The carmaker works with AmeriCredit Corp. of Fort Worth for subprime lending and U.S. Bancorp for leasing deals. GM wants more lenders to compete for the loans to lure customers with more options and better rates, the people said.

About 7% of GM's customers are subprime borrowers, which is the same proportion as the overall U.S. new-car market, said Randy Arickx, a spokesman. Automaker-owned lenders have 17.1% of the business in subprime lending, according to Experian Automotive in Costa Mesa, Calif.

Most of GM's major rivals own their own finance companies. The captive lenders aid the parent company's sales by taking added risk and paying to reduce interest rates on subprime borrowers' loans and move them into near-prime loans.

With more competition among banks, the lenders may offer car buyers better loan terms or lower monthly payments, helping GM sell more cars, one of the people said.

GM has found that dealers have often had to lengthen loan terms for subprime buyers to offer lower monthly payments because the banks won't lend at more attractive interest rates.

GM executives had debated whether the company should own a lender, with some arguing that the automaker's junk credit rating would make it costly to raise capital for loans, said three people.

The automaker could enlist outside banks to make car loans or write leases for consumers while branding the financing under the GM name, Keller said.

GM may still have a chance of acquiring GMAC, two of the people said. For now, GM doesn't see a way to do the deal, doesn't want GMAC's ResCap mortgage unit, and GMAC also wasn't interested in selling, they said.

The Treasury Department owns 61% of GM and 56% of GMAC. While some Treasury officials favor merging the two, the government doesn't want to get involved in forcing a deal, the people said.

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