• Oct 6, 2008
Leasing is down industry-wide by about 50 of all GM products in September, and the decision to do so had everything to do with the recent events of the financial markets. While leasing was down GM-wide in September, GMAC and Chevrolet were hit the hardest. The General's two volume brands accrued only .6 of its sales through leasing, compared to 11.2 respectively last year. Leasing is virtually non-existent for vehicles with low residuals, and Cadillac, which typically leases over 40 clip last month.
Nobody on Wall St. is purchasing securities right now, giving GMAC very little money to offer leases to its customers. A controlling interest in GMAC was purchased by Cerberus well before the private equity firm took control of Chrysler. Chrysler stopped leasing all together on August 1 in response to the huge losses it took on returned leases of SUVs and trucks. Both GM and GMAC say the break from leasing is only temporary, but with the financial markets still in flux, don't expect this trend to reverse itself any time soon.

[Source: Automotive News, sub. req'd]


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 4 Comments
      • 6 Years Ago
      I wonder how will these affect future sales. Usually those that lease, become a captive customer 36 to 48 months down the road. However if you purchase your vehicle over a 60-72 month period and you haven't built much equity (or is even upside down), more likely you will stick with the car and even many that have built equity migth plainly decide to not lease again and stick with the car until paid off and save on future monthly payments.
      • 6 Years Ago
      For the past 8 years I have leased some form of GM vehicle and wanted to lease again but was unable to do so.

      OH Well, I am happy with my LEASED Mazda.
      • 6 Years Ago
      it's interesting that GM is the company mentioned. this is an industry-wide trend, and it will be the high end imports that have been hit even harder.

      the US head of BMW had spoken in Automotive News about the need to cut leases. BMW presently leases over 70% of the vehicles it markets in the US, and they plan on cutting this to the mid-40% range.

      all the high-line manufacturers have been losing tremendous amounts of money when the cars come in at the end of lease, when they go to auction. the residuals that had been written 3 or 4 years ago are not remotely connected to what the vehicles are actually bringing, which today is usually at least $10,000-$15,000 less than residual value.

      no company is crazy enough to keep bleeding like this. leases will also be discontinued by the high-line companies as well, or payments will double or triple to reflect the real-world residual value.

      I think this will result in drastic drops in sales of high-line imports. the average person, let's say, that leases a 3-series BMW for $399 per month will not want to step up to the plate for a payment of $750 per month for 72 months on a purchase contract.

      AZMike
      • 6 Years Ago
      Brian the mainstream media is so far behind it is sad.


      The Media harps about Volt and Tesla as if they were announced yesterday. I heard Bob Lutz say the same thing he said at least 100 times before.

      Also, mainstream Media seems to think that Volt will be a GM savior. According to GM itself they are planning to lose money on Volt through the first generation, which in GMs case is 5-7 years. Media does not understand and doesn't want to understand that Cruze is BY FAR more important to GM than Volt.