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Discussion Starter · #1 ·
Went to two dealers to talk about leasing a 2008 Corvette. One said flat out they don't do any leases because of GMAC cutbacks, the other said that SmartBuy is 18% APR (he didn't run my credit) and is pushing me to buy traditional. This is difficult due to biz accounting rules, but what do you think, am I just getting the run around or is it really sad?

(P.S. Vette sales are slow, the one I wanted to drive wouldn't even start due to dead battery, and the dealer has a 2007 on the lot)
 

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I recently went through the same issue with Saturn. According to my salesdude, leasing is dead with no sign of resurrection. Of course, he told me every other manufacturer will do the same. Not true. Honda, Toyota, Nissan etc. all quoted me very competitive lease rates while GM pushed me towards a 72 month purchase at 0% (minimal cash off MSRP). I too lease for business and take issue with a 6 year loan when my company wants vehicles newer than 4 years old. I can understand GM's business decision to back off leasing but there will be many that won't be considering GM next time around as they don't offer competitive leases.
 

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Chrysler axed leasing and then within about a week GM followed suit.
That guy that came to Chrysler from Toyota(I think it was Jim Press but I'm not 100% sure on that) was quoted around that time as saying that all the auto makers will be getting out of leasing before too long. I don't think "everyone" will get of of leasing but the cost for the end consumer is going to be going up. I looked at the Toyota Matrix today and the lease rate on it was 8.95%. Even for a busness it is probably better to go 0% for 72 months and trade or sell after 3 or 4 years then to pay that kind of borrowing cost.

Of course just as there were many people who would never lease even if it worked out to their financial bennifit, there will also be a number of people who will do nothing but lease even if changes come about that make it financially unwise for them.
 

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Even for a busness it is probably better to go 0% for 72 months and trade or sell after 3 or 4 years then to pay that kind of borrowing cost..
....at a pretty big loss. Residuals on a GM after 3 or 4 years are nowhere near what is owed even at 0%. After a few quick comparisions I found you would need too keep the car over 5 years to break even. Toyota and Honda reduced their overall lease costs (even at 6 or 7%) they are very competive on many models.
 

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geesh a 72 month car loan?I would hate to see the amortization schedule on the loan. If you have to have a 72month loan to afford a car you should be buying a cheaper car. I guess businesses are a bit different but still.
 

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I just purchased a 2008 Cadillac Escalade taking delivery next week and I wanted to use GMAC's Smart Buy. However the interest rate was 11.2%. So, GMAC clearly is looking to limit its leasing business. I am purchasing this time using traditional financing. With the current incentives in the tri-state area, I found myself purchasing five months earlier than I needed, with the Employee Discount plus $7000 Cash rebate created a very compelling incentive to buy and I did.

JLM
 

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GM and Chrysler dealers in SE Michigan are still offering leases but they are using other financial institutions and the deals are not spectacular. The market here is heavy on leasing so they are afraid to just take the option away from customers. While I can see getting away from ridiculously low payments, walking away from leasing is a very risky move by GM & Chrysler/GMAC/Cerebus. Some customers will simply go somewhere else.
 

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Discussion Starter · #9 ·
geesh a 72 month car loan?I would hate to see the amortization schedule on the loan. If you have to have a 72month loan to afford a car you should be buying a cheaper car. I guess businesses are a bit different but still.
I can afford to pay for the car in cash, but prefer not to. Thanks for being judgemental.
 

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You will find that there is a great tendency to generalize and stereotype on the internet.

Just as you can pay in cash, I can afford a higher payment. However, our household income is lower in the hottest summer months, thus, having the ability to pay less if needed, is nice. I will pay substantially more the other months, and still pay off my truck in less than 5 years (with the effective interest rate being significantly less than on the contract).

I guess I get used to stereotypes............... after all, I am a female motorhead. LOL

In my opinion (and we all know about opinions), GM has gone overboard. However, they really do not have a choice, with the Cerabus connection. My understanding is that Ford has severely limited leasing on trucks and SUV's, with the other vehicles getting slight corrections. Of course, what I have read, and what is actually going on, can be two very different things.

When we had our business, we were able to take good deductions on our vehicles, and we did not lease. Maybe we just had a really good tax guy (which he is, I still use him).
 

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I just purchased a 2008 Cadillac Escalade taking delivery next week and I wanted to use GMAC's Smart Buy. However the interest rate was 11.2%. So, GMAC clearly is looking to limit its leasing business. I am purchasing this time using traditional financing. With the current incentives in the tri-state area, I found myself purchasing five months earlier than I needed, with the Employee Discount plus $7000 Cash rebate created a very compelling incentive to buy and I did.

JLM
Did you mean, "Smart Lease?" A Smart Buy is a buy that's structured like a lease.
 

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Did you mean, "Smart Lease?" A Smart Buy is a buy that's structured like a lease.
Hi Buick61,

Yes I meant to say Smart Buy. I purchased my 2005 Cadillac STS V8 and XLR under a GMAC's Smart Buy contract. This agreement offered the best balance in terms of limiting the buyers cash with the most-flexible, sell, trade-in and return terms and conditions for my requirements. I would have easily purchased my new Escalade through GMAC's Smart Buy if the interest rates were competitive.

One of the terms and conditions I used in purchasing this time was GMAC's ''Pull Ahead" feature which removes 2 months plus balloon payments as long as I was replacing my current Cadillac with another Cadillac. If this feature did not exit, I would not have purchased 5 months early and would not have taken advantage of the GM Employee Discount and Cash Rebates. Again most car buyers do not evaluate the terms and conditions of their lender's contract and in my case in 2005 GMAC offered the very best terms and conditions and competitive interest rates. However, today GMAC's interest rates for Smart Buy did not meet my requirements.

JLM
 

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geesh a 72 month car loan?I would hate to see the amortization schedule on the loan. If you have to have a 72month loan to afford a car you should be buying a cheaper car. I guess businesses are a bit different but still.
The amortization schedual???
0%.
Think about it for a moment, 0%.
It's a straight to principal payment, it's the best looking amortization schedual you can get.

If there are no other credits available in place of using 0%(and on many vehicles, there are not) then why wouldn't you use someone else's money on the cheep for as long as possible.
My investments are averaging 13-15% growth per year.
What is the advantage to me to stop earning 13-15% just so I can save 0%?
Why is it important to get an interest free debt paid off faster with money that can be earning it's own income?
 

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Moman:

We have discussed the lease problem over the last month, extensively. However, because a lot of us can't be on the internet daily I will recap the details for you.

GMAC formerly wholly owned by GM, has been partially acquired by Cerebus LLC (the same company that owns Chrysler. Cerebus now owns the controlling interest in GMAC. Over the last several months, the Credit Crisis has touched all areas of Lending, in this case the Leasing of Domestic USA cars (GM, FORD, CHRYSLER) in the USA and Canada. The only car line, exempted (at least temporarily is Cadillac). Unfortunately the issue that caused this started in Canada, where the Lease Return values of especially SUVs caused major losses. This issue has not affected the foreign car market, as of this writing!

As a previous poster wrote: A qualified Accountant can structure a purchase that will give you most of the benefits of a lease, however you will have to invest more money of your own to participate. Of course you can lease a foreign model, such as a SL550, and if your Credit is stellar (It takes that today) you can be very happy, indeed.

Unfortunately these are some of the adjustments that modern consumerism has today, also shop around on the internet, there may be other Leasing Agencies that may be able to assist you.

Best of Luck!

:drive:
 

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Just got done watching an IDL from General Motors concerning leasing. Jim Bunnell of GM said himself that they're departure from leasing is "strictly a bank funding issue". Seems that Cerebus Corp after buying 51% of GMAC and 80% of Chrysler now want to try and make their money back by getting away from vehicles that lose as much value as the Durango, Envoy and Trailblazer have in the last few years.
GMAC has however offered to continue a supported lease program on Cadillac CTS and Saab 9-7X, but those are the only 2. What a shame!! They did have a Q&A session and some of the other dealers in the country sounded off to them about how much business they're losing and going to Honda and Toyota. Bunnell tried to make it sound like everybody's getting off of the lease boat, but then he said himself that he hopes "leasing comes back".
It doesn't seem that it's something GM is doing, it's something that the owners of GMAC are doing. Ford still has some decent lease programs going on thru their captive bank, FMCC, which is NOT owned by Cerebus. Hmmm......maybe selling GMAC off to pay for other foolish larks wasn't as good an idea as they'd thought.
 

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Off topic... but you're a woman? Cool! We don't have enough of your kind here!
LOL................ Yeppers. I know my husband is certainly happy that I am. LOL

Now that I am a stay-at-home Mom, I can offer that perspective (first time in my life that I have been able to make that decision to not work) ................... Of course, don't expect me to have alot in common with many women. I can't stand shopping (except for car parts or home improvements, and I probably own less clothes and shoes than most of the guys in here), I'm not vain (do not get my nails done, do not dye my hair (yes I proudly wear my grey, after all, I am the 44-year-old mother of a 6-year-old)and wear little makeup), do not have many female friends (they are too catty), and love cars/trucks, wrenching, camping, fishing, and anything outdoors. I do, however, like to cook and garden also.

Thanks for the curiosity. I met my husband in the Fourwheeler chatroom, talking trucks. For some strange reason, I was the only female there. LOL I use a gender neutral login, because I have found that some males have a problem with me (they have a tendency to be late teens or twenty something know-it-alls), because of my plumbing.

Anyway, on topic................ this is an area where selling the stake in GMAC really hurts. They do not have control over their finance arm any longer. Its too bad they couldn't have seperated the auto finance, and mortgage arms. This would have limited their liabilities in term of mortgages, yet left them with the options they need for auto finance.
 

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Discussion Starter · #18 ·
Moman:

We have discussed the lease problem over the last month, extensively. However, because a lot of us can't be on the internet daily I will recap the details for you.
Paul,

Thank you for the excellent recap. I don't get on here as much as I used to, but I'm working more now. I will let you all know what I decide to do. Purchasing is the only option right now.
 
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