The Detroit 3 aren't the only automakers feeling the hurt from lease
vehicles coming back worth much less than expected. Leases account for 60% of BMW's
sales in the U.S. compared to just 20% of sales in the industry as a whole. As such, BMW will begin offering incentives like never before to encourage customers to buy a vehicle instead and reduce the number of leases it has on the books. In some cases the German brand is offering loans with finance rates as low as 0.9% over five years, and of course these incentives will be aided by a commensurate raise in lease prices, as well.
Nearly all luxury makers are in the same boat as BMW, as Bloomberg reports that leases also comprise 55% of sales at Mercedes-Benz
, 43% at Lexus
and 42% at Cadillac
. While the residual value of luxury vehicles
isn't falling quite as fast as SUVs and full-size trucks, the market's shift in preference to smaller, more fuel efficient
vehicles means that there is less demand for vehicles that tend to conspicuously consume copious amounts of fuel. Thanks for the tip, Rich!