Car Manufacturer to stop leasing cars.

[PopeyeFAFL]

What do you think of the fact that US Car Manufacturers are moving away from the Car Lease?Will US Car Manufacturers end-up pushing customers to Toyota/Honda who might still offer lease (since their cars hold they values better) or open the door to Chinese Car Manufacturer who might offer flashy features pack cars at ridiculous per month lease?I think, lot of people will soon realize that they are poorer then they thought.Quote »If you thought the industry was worried about the general downturn in the U.S. auto market, add in the leasing situation and you’re starting to see signs of panic.This past week, Chrysler announced that its captive financial subsidiary will halt automotive leasing. Now, Ford and General Motors plan to sharply trim back their leasing programs. And a number of banks, including J.P. Morgan Chase’s Chase Auto Finance unit, are scaling back or are cutting leasing out, as well.Who loses? That’s a good question. Certainly, there’ll be a lot of consumers forced to downsize their aspirations. And plenty of others might be driven out of the new vehicle market entirely. For manufacturers, that’s lost business and lowered expectations, as it’s another reason why the ongoing market slump might continue.http://blogs.thecarconnection....-era/

[jake75]

The problem has been the closed end leases where the lender takes the risk of the car's residual value. This is nothing new. I leased a 2007 Corolla for 2 years. Residual was pegged at about $13,000. At lease end in 2009 I negotiated a buyout from Wells Fargo for $11,000. That was more than they could get at auction. Wells Fargo was so stupid they calculated the residual on a % of msrp. The dealerfs were smarter - they loaded up these cars with extemely high margin options such as gold package, interior fake wood trim, spoiler etc. to pad the msrp that in turn padded the residual. But those optiosn added zero to the used value.