Leases are Pretty Much Gone...

[tirediron]

Just got our new programs for our BPG Store, all Interest rates bumped 2 points on the remaining 5 cars with any programs at all. Acadia, G6, Enclave, LaCrosse, Lucerne are the only vehicles left with any GM-backed rates and residuals.

Not Good. We do 85% leasing in this area.

[montrealvue]

Are you talking about '08's or '09's? It only makes sense for '09's to have a higher interest rate. The '08's should be in the 0% range.

[tirediron]

08's.
The only car in 09 Lease Programs is the G6 with a 7.10% rate. (2.95% Yesterday on 08's)

[montrealvue]

Originally Posted by tirediron

08's.
The only car in 09 Lease Programs is the G6 with a 7.10% rate. (2.95% Yesterday on 08's)

7.1%....yeah, no thanks.....

[zete]

Originally Posted by montrealvue

7.1%....yeah, no thanks.....

If I remember my morning paper correctly, Toyota is asking 6.9% for their leases up here.

The days of cheap leases is over. If you can't afford to buy it you won't be able to drive it.

[montrealvue]

Originally Posted by zete

If I remember my morning paper correctly, Toyota is asking 6.9% for their leases up here.

.

The difference is buyers expect Toyota to be higher and are used to high interest rates. GM on the other hand has been known for 0% (or around that range) for many years. A jump to 7% will definitely scare off more than a few potential lease customers. I agree that GM needs to be out of the red with leases, but customers won't see it that way.

[tirediron]

That was yesterday, which feels like an eternity ago. Those days are seeminlgy gone. Off to find a new job.....


GMAC just told us their "Standard Lease Rate" Gulp--16%!!!!!!!!!!!!!

[tirediron]

Originally Posted by montrealvue

The difference is buyers expect Toyota to be higher and are used to high interest rates. GM on the other hand has been known for 0% (or around that range) for many years. A jump to 7% will definitely scare off more than a few potential lease customers. I agree that GM needs to be out of the red with leases, but customers won't see it that way.

Leases have never been 0%. That is only for purchases.
The jump was from 2.95% to 4.95% on an 08 G6. From 5.1% to 7.1% on an 09.
G8, as an example, went from 5% to 16% Standard Rate.

GM hasnt made it official yet, but this is pretty damned official to me! They are done with leasing in the US!

[zete]

Originally Posted by montrealvue

The difference is buyers expect Toyota to be higher and are used to high interest rates. GM on the other hand has been known for 0% (or around that range) for many years. A jump to 7% will definitely scare off more than a few potential lease customers. I agree that GM needs to be out of the red with leases, but customers won't see it that way.

No. A few months ago Toyota was offering 1.9% and 2.9% leases. Everyone's jacked their lease rates up. I hear BMW will be showing ads with major increases in lease rates soon.

Toyota is offering 2.9% financing on purchases, BTW. It seems everyone is starting this flip towards generous financing and less generous leasing.

[JerryL]

This should be interesting in SoFla......sometimes it seems like 100% of new cars here are leases.

[zete]

Originally Posted by JerryL

This should be interesting in SoFla......sometimes it seems like 100% of new cars here are leases.

Cheap money -- for housing and cars -- meant a lot of folks were living beyond their means. A lot of those folks that walked away from their homes will walk away from their leases. I see some serious pain for the Germans.

[montrealvue]

High lease rates are only going to hurt in the long run. With a lease, the buyer is back in the market in 3 or 4 years. If you push them to financing at a low rate, they are back in the market for a new vehicle in 5 or 6 years. Though I understand the short term goal, in the long run manufacturers will suffer from high lease rates.

[zete]

Originally Posted by montrealvue

High lease rates are only going to hurt in the long run. With a lease, the buyer is back in the market in 3 or 4 years. If you push them to financing at a low rate, they are back in the market for a new vehicle in 5 or 6 years. Though I understand the short term goal, in the long run manufacturers will suffer from high lease rates.

The interesting thing to me is with 5 or 6 year financing you can go from a 3 or 4 year product cycle to a 5 or 6 year cycle, matching up with the financing more closely.

In the end, it'll be interesting to watch this all shake out.

[tirediron]

I've been selling for 10 years and I honestly do not think I can keep doing this as a career to see this play out. We literally do 85-90% Leasing. People simply can not afford to pay $200 more per month in Michigan right now to purchase a car. Which obviously completely destroys my income. Even if we can retain 50% and get them into a purchase, we wont see them again for another 4,5,6,7,8 years!

There has to be a happy medium but I'm pretty sure the head honchos at GM have no clue how to reach it.

I need a beer.

[pontiacjs]

It looks to me that the General does not want any dealer to make thier SFE quotas.