[doh]

http://online.wsj.com/article/SB121734798153793667.html?mod=yahoo_hs&ru=yahoo


Ford Motor Co. has informed dealers that it is raising the price on leases of its most profitable trucks and sport-utility vehicles due to the "extreme losses" its lending arm is taking on these vehicles.

Meanwhile, GMAC LLC, which is minority-owned by General Motors Corp., has decided to stop extending lease deals to consumers with the lowest credit ratings. The decision affects car buyers who fall in the lowest two of six credit-rating categories, said George Fowler, general manager of Superior Buick Pontiac GMC in Dearborn, Mich.

The move by Ford is expected to make several 2008 model year trucks and SUVs "lease proof," according to the company. In other words, prices will be so high on these leases that consumers won't be willing to agree to terms, according to a dealer briefed on the matter.

In a memo sent via email Monday, Ford officials informed dealers "due to extreme losses Ford Credit is taking on off-lease vehicles, it will be necessary for Ford Motor Credit Company to adjust residuals mid-quarter on the following vehicle lines." The memo was obtained by The Wall Street Journal.

Off-lease vehicles are vehicles that come back to the dealer after a lease has expired. Typical leases run between 24 months and 36 months, although some leases extend longer than that.

"Our business plan always includes a certain amount of leasing to support Ford sales," Ford Credit spokeswoman Brenda Hines said Tuesday. "We don't publicly discuss our leasing forecast."

The changes are effective Aug. 1, affecting the Ford F-150 and Super Duty pickups, and the Ford Explorer and Sport Trac SUVs.

"If you have any customers that want to lease any of [the affected] vehicles, the time is now," the memo said.

Ford's move comes as GM and also Chrysler LLC are tightening vehicle-leasing terms, or backing away from the practice altogether. Chrysler said Friday that its credit arm, Chrysler Financial, will stop financing leases, while GMAC will stop subsidizing leases in Canada.

 

[tgagneguam]

I am incredibly hesitant even to suggest this, but is Detroit finally taking a long-term view of their business plan? Is Detroit thinking about short-term pain for long-term gain? Will the horrors never stop?

Meanwhile, GMAC LLC, which is minority-owned by General Motors Corp., has decided to stop extending lease deals to consumers with the lowest credit ratings.

It's funny that what seems to be complete common sense on the part of many average Americans is heralded as strong business strategy in some circles.

Then again, one of the safety messages on the box to my iron suggested that I should not iron my clothes when I'm wearing them. I see. Thank god I didn't just tear into using my iron!

 

[MaxLegroom]

I am incredibly hesitant even to suggest this, but is Detroit finally taking a long-term view of their business plan? Is Detroit thinking about short-term pain for long-term gain? Will the horrors never stop?

LOL The horrors, as you put it won't stop as long as the ideas remain kinky.

 

[regfootball]

this is another example of the lending markets overreaction to the mess they created for themselves

 

[doh]

this is another example of the lending markets overreaction to the mess they created for themselves

True to a point, there will still be 3 years of pain and then nothing. But they could use some of the "Subvented financing charges over the next 3 years to offset the loses over the next 3 years.

There is a value after 3 years, they just cannot afford another double hit like the slumping US Green Back, and the rising oil prices.

 

[EllwynX]

I've always had difficulty leasing anyway. Not due to my credit, which is good, but due to them always 'running the numbers' for the vehicle I'm interested in and it always coming up that it's cheaper (payment-wise) to buy the vehicle. Or I get the 'these don't lease out very well'. I can't really disprove what they're saying.

Unlike when I buy a vehicle and can research it, there isn't that much research I can do in regards to the leasing programs/details. They're pretty much set and/or only understood/known by the dealers.

I always ask HOW it's possible for the lease to be more than a payment, when that's one of the points of leasing. I never really get an answer.

 

[tgagneguam]

this is another example of the lending markets overreaction to the mess they created for themselves

Denying credit to people with FICO scores of 450 is not an overreaction to the mess the financial concerns created. It's a sign that sensibility is returning to the credit markets. If this type of sensibility lasts-I'm quite certain it won't-it will do wonders for the financial system.

The House pandering to the financial service industry and to a very small minority of homeowners by passing the $300 billion FHA refinancing "mortgage crisis" bill is overreaction. And Liberal Bush not exercising his veto power is even more of an overreaction, despite his initial objections to such a proposal. Both Congress and Liberal Bush deserve their embarassing low 20's approval ratings.

I am dying for election season!

 

[Greg Burr]

D'oh is a perfect name to post this article. Like whoops!

 

[EllwynX]

Denying credit to people with FICO scores of 450 is not an overreaction to the mess the financial concerns created.

I didn't even think you could GET a loan with a score that low.

Liberal Bush

Now there's two words I never thought I'd see used together.

Whoever wins the next election, I just hope they lessen the stranglehold the religious right has currently...

I'm far from Conservative, but I'm not full blown Liberal either. Yes, I tend to vote Democrat.

Back to car-talk.

 

[Extreme4x4]

Denying credit to people with FICO scores of 450 is not an overreaction to the mess the financial concerns created. It's a sign that sensibility is returning to the credit markets. If this type of sensibility lasts-I'm quite certain it won't-it will do wonders for the financial system.

The House pandering to the financial service industry and to a very small minority of homeowners by passing the $300 billion FHA refinancing "mortgage crisis" bill is overreaction. And Liberal Bush not exercising his veto power is even more of an overreaction, despite his initial objections to such a proposal. Both Congress and Liberal Bush deserve their embarassing low 20's approval ratings.

I am dying for election season!

Yea, and we will probably end up with Obama.............. because of people wanting "change." He offers plenty of it, as he "changes" his position on things every day.

Be careful of what you wish for............ you just might get it.

Sorry, I didn't mean to get politics involved. Frankly, I'm kind of scared about what will happen at election time.

 

[blank disk]

Extreme times.
Extreme measures

 

[Neanderthal]

I am incredibly hesitant even to suggest this, but is Detroit finally taking a long-term view of their business plan? Is Detroit thinking about short-term pain for long-term gain? Will the horrors never stop?

It's funny that what seems to be complete common sense on the part of many average Americans is heralded as strong business strategy in some circles.

Then again, one of the safety messages on the box to my iron suggested that I should not iron my clothes when I'm wearing them. I see. Thank god I didn't just tear into using my iron!

:lmao::bounce:

Denying credit to people with FICO scores of 450 is not an overreaction to the mess the financial concerns created. It's a sign that sensibility is returning to the credit markets. If this type of sensibility lasts-I'm quite certain it won't-it will do wonders for the financial system.

The House pandering to the financial service industry and to a very small minority of homeowners by passing the $300 billion FHA refinancing "mortgage crisis" bill is overreaction. And Liberal Bush not exercising his veto power is even more of an overreaction, despite his initial objections to such a proposal. Both Congress and Liberal Bush deserve their embarassing low 20's approval ratings.

I am dying for election season!

Hey, yer killin me!!

I'd be more cheery regarding elections if the same old -cons and -comms weren't running.

Funny nobody mentions 'bammy's 800 billion UN bill. Hell, what's a few hunnert billion?

As to actually demanding a reasonable credit score for lease customers...I guess anybody who doesn't iron their clothes while wearing them will probably qualify once this stuff blows over.

 

[Extreme4x4]

Things are always cyclical. Credit will get tight for a while, then some financial institution will go "hey, we could make a bunch of money if we gave high interest loans to that bunch of people who noone else will lend to."

Then credit loosens up again.

I was in the mortgage industry for 7 years, so I have definitally seen it. Luckily, I got out in 2006. I was never the rich loan officer.............. I was too honest (but I did sleep good at night).

 

[redimpss5]

I understand why Chrysler did it. The cars they sell cant hold resale at all, has been that way for years, but Ford is supposed to be as good as Toyota, or at least that is what they say in the ads on TV. But wait, since Toyota is not the best these days, this is where Ford screwed up saying the cars they sell are not that good. The lease people need to resale the cars after 3 or 4 years and junk will not resale. But then again, most people who lease cars never take good care of a car, so I know I will never buy one and maybe that's why the new deal is not lease new cars.

 

[tgagneguam]

...Now there's two words I never thought I'd see used together...

If he spends like a liberal, if he supports measures to expand government's role like a liberal, if he supports measures for the government to tell you increasingly how to run your life, then he's a liberal.

When the Republican Party seeks to return to its roots-less government is good government-you will see, among many other things, companies being held responsible for their misguided lending practices. No common sense in lending? No tax-payer-backed bailouts. News that Ford is narrowing the pool to whom it leases vehicles should become non-existent.

 

[377Z]

If he spends like a liberal, if he supports measures to expand government's role like a liberal, if he supports measures for the government to tell you increasingly how to run your life, then he's a liberal.

When the Republican Party seeks to return to its roots-less government is good government-you will see, among many other things, companies being held responsible for their misguided lending practices. No common sense in lending? No tax-payer-backed bailouts. News that Ford is narrowing the pool to whom it leases vehicles should become non-existent.

I just pray that the Republican Party will someday finally see where emulating Liberals gets them, so that things can get back to the roots.

 

[vcs2600]

If he spends like a liberal, if he supports measures to expand government's role like a liberal, if he supports measures for the government to tell you increasingly how to run your life, then he's a liberal.

Bush is actually the most conservative president we've had since Hoover .. considerably more so than Reagan (who *gasp* raised taxes many times).

If even a conservative wet dream like Bush is "too liberal" for the true believers, that explains perfectly why the GOP is nosediving towards political irrelevancy. Luckily for the republicans, they were smart enough to nominate McCain, who is pretty much the only guy they've got with some reputation for moderation and therefore a chance in the general election.

sorry for continuing the political derail