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I'm going to start this off by saying that I am far from an expert when it comes to how certain types of loans work.
In Fargo, Jerry seems to have multiple schemes to get money. One of which is $320 000 he tries to get from GMAC. That being said, I don't understand how this type of loan works. How do the fake cars and fake customers play into the loan? Would anybody be able to explain it to me?
It seems Lundegaard is running a small scale version of a fraudulent business scheme that actually happened in the 1980s and involved GMAC.
The basic scheme would be to "sell" the vehicles to a shell business or front, and arrange finance that would be settled when the shell "sold" the vehicles a month later. The original scheme simply increased the value of "sales" (and therefore a larger loan) each month, to cover the previous month's loan and also provide money to the fraudster to support his other business activities and lifestyle.
Unlike the real life fraudster (who was not uncovered for 11 years), Lundegaard seems to be a bit of an idiot and has been caught out by faking vehicle ID numbers, or had not planned to continue the fraud in the same way.
The movie tells us that GMAC extended credit against the purchase of cars and that the cars don't really exist or were already sold. It doesn't tell us more than that. HorusKol suggests that the scam is modeled on an actual crime in which GMAC thought it was financing the purchase of non-GM vehicles. It is also possible that GMAC financed the sale of GM cars to the dealer and should have been paid back when those cars were sold to end-customers, but that Jerry sold the cars and kept the proceeds for himself, submitting false documents to GMAC suggesting that different (or anyway unidentifiable) cars had been sold instead.
Similarly, we are not told why Jerry needed the money. Had he lost it gambling, or was he just living beyond his means, or something else, we don't know.
Amendment: HuffPo quotes Joel Coen as saying “…there was a guy, I believe in the ‘60s or ‘70s, who was gumming up serial numbers for cars and defrauding the General Motors Finance Corporation. There was no kidnapping. There was no murder. It was a guy defrauding the GM Finance Corporation at some point.”
This could be the scam @HorusKol referred to, though Joel Coen doesn't seem to have worried much about the details, and in the manner this crime is portrayed in the movie, they don't matter.
