Detroit's Losses Mean Higher Car Payments for Leases
Leasing a car is about to get more expensive.
Chrysler LLC, the money-losing automaker owned by Cerberus Capital Management LP, is closing its unprofitable leasing business today, and General Motors Corp. and Ford Motor Co. are scrapping leases for some models.
``People who want a lease will have to pay much more attention,'' said Joe Spina, an analyst at Edmunds.com, a car- buying Web site in Santa Monica, California. ``They'll need to crunch numbers harder and make sure it still makes sense.''
While finding a finance company gets trickier, declining resale values mean payments for a typical lease on a new $43,000 Grand Cherokee Overland SUV may climb as much as $70 a month to $840 from a year ago, industry analysts estimate. About 20 percent of U.S. new-vehicle sales have been leases this year, according to data compiled by researchers at J.D. Power & Associates in Westlake Village, California.
Chrysler today announced new terms for purchases aimed at lowering monthly payments. They include 72-month loans on a wider range of vehicles, $2,000 cash back and an extra $750 for returning leasing customers who buy a vehicle.
``The economics of leasing have changed,'' said Chrysler Financial spokeswoman Amber Gowen. The company is focusing more on making buying cars more attractive and supporting customers who want to purchase rather than lease, Gowen said.
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