Lease Programs Trouble Manufacturers, Dealers

The same economic factors dragging everything down at the moment — the credit crunch, rising gas prices and so on — are combining to create yet another problem: They’re forcing dealers to cut or modify their leasing programs, making it much more difficult for the average buyer to lease a vehicle.

USA Today has a good roundup of the ways manufacturers are adjusting their programs. Chrysler, for example, is cutting its leasing offers altogether, forcing dealers to find another method of financing leases if they want to offer that option to buyers. Ford is being forced to write down $2 billion in lost value on leases, leading to higher rates, and GM has been “weeding out riskier customers” over the past year.

Customers are affected in a couple of ways: Leases are getting harder to find, and if a customer does find one, the lease is much more expensive than before. That’s not to mention lessees who want to drop their gas-guzzling SUV leases before the terms are up. 

Comments

Any word yet on how this will affect entry luxury/luxury marques like Lexus, BMW, Infinit and Benz?

In east cost markets they lease a LOT!

Info,
most luxury brands aren't impacted yet. It all depends on residual value and for the most part the luxury brands haven't lost any.

Leases are still available on luxury marques. But, sales are way down, and the manufacturers haven't resorted to monster incentives (yet). They may pump up the incentives when they're struggling to make year-end sales targets.