Teh Lease = Teh Gone

[AMRAAM4]

Cerebrus already told Chrysler no more.

Just read on another board someone who received a notice at work that as of August 1 there will be no more leases on GM trucks, SUVs, and a majority of their cars. I believe it, but only question tomorrow as the drop dead date (I just realized what date today is )


Makes sense, The big 3 have been losing their ass on leased vehicles because they make the residuals too high in order to keep payments low. People dump them after a lease and GM is stuck with a used TrailBlazer they said is worth $23k, when then all thy can get at auction is $15k.

[notsoaveragej0e]

Yeah well teh Chrysler is going to be teh gone in ~3 years unless they A) Heavily divest themselves into other companies (which they are in talks with TaTa and Fiat now to do) or B) Sell themselves outright.

My dad told me GM is losing 5-8 grand on each truck (TB to Silverado) that's coming off lease at auction right now. You can only imagine what Chrysler is losing on their big pickups-- I have a friend who is leasing a loaded Ram for ~$250 a month. Way to totally shoot yourself in the foot, Chrysler.

[GregFarz78]

I can see trucks and SUVs b/c the residual is worth crap when the lease is over but to drop leases on cars is just stupid GM is going to lose a lot of corporate sales. I've been saying for a while most domestics aren't worth leasing b/c the residual value is crap you can get more value leasing a infiniti/lexus/bmw. I guess GM was playing with the residual value so they wouldnt lose sales to imports and ended up hurting themselves in the end. Thats one reason I turned down an offer to lease a GTO they wanted too damn much for them it made more sense to buy one.

I saw an add for dodge truck a few weeks back 50% off MSRP so they're really losing their ass on them.

[Exodus]

Trucks gone once my lease is up in ~10 mos
Not paying addtl: 14.5k on it after

[notsoaveragej0e]

Originally Posted by GregFarz78

I can see trucks and SUVs b/c the residual is worth crap when the lease is over but to drop leases on cars is just stupid GM is going to lose a lot of corporate sales. I've been saying for a while most domestics aren't worth leasing b/c the residual value is crap you can get more value leasing a infiniti/lexus/bmw. I guess GM was playing with the residual value so they wouldnt lose sales to imports and ended up hurting themselves in the end. Thats one reason I turned down an offer to lease a GTO they wanted too damn much for them it made more sense to buy one.

I saw an add for dodge truck a few weeks back 50% off MSRP so they're really losing their ass on them.

You'd be disgusted of you saw the parking lots FILLED all over metro Detroit with Chrysler Pickups and Caravans and Jeeps for the past 5 years. They overbuilt the piss out of every brand in order to increase their value on paper as a company, and liekwise shot themselves in the foot by doing so. Their CFO should be in jail.

[AaronGTR]

I believe it. Ford is in even worse with their trucks. The gas price increase and mileage that trucks/suv's get isn't helping the situation either. Here in FL, they are practically giving away Ford F150's at auction because no one wants them. The Ford guy who sells lease trade ins is practically in tears every time.

Very bad for the big 3 indeed. Only good side I can see to it is, if you need a truck for work and have no choice about the gas mileage, you can get a new truck dirt cheap!

[Cliff8928]

Originally Posted by AMRAAM4

Makes sense, The big 3 have been losing their ass on leased vehicles because they make the residuals too high in order to keep payments low. People dump them after a lease and GM is stuck with a used TrailBlazer they said is worth $23k, when then all thy can get at auction is $15k.

Yeah, the XLR goes back in October, the buyout on the lease is something nuts like 50K+, the car isn't even worth 40 right now, let alone in October when nobody wants to buy a roadster.

[Mike Jung]

GMAC to stop subsidized leasing in Canada

July 29, 2008 6:10 PM EDT
Reuters

DETROIT–GMAC Financial Services said today that it will no longer offer lease-related incentives in Canada, citing market conditions and recent steep drops in used vehicle residual values.

GMAC spokeswoman Gina Proia said GMAC will suspend Canadian incentivised lease offers effective Aug. 1, but will continue to offer standard-rate leases.

Proia said the company does not break out the proportion of Canadian leases involving incentives. Detroit-based General Motors currently offers Canadian leasing incentives such as rates as low as 0.5 per cent for up to four years on its Pontiac Montana passenger van and Torrent sport utility vehicle.’

GM Canada said it has been moving away from supporting lease rates for new vehicles over the past six months in favour of offering customers financing options that are more attractive.

The company said it will offer buyers finance options with payments the same or equal to those of leases.

Proia said that as of today, no similar announcement had been made concerning U.S. GMAC leases.

The news, conveyed to Canadian dealers yesterday, follows Chrysler LLC’s announcement that its financial arm will get out of the U.S. automotive leasing business by the end of the month.

Both Chrysler Financial and GMAC are majority owned by Cerberus Capital Management LP. The private equity firm owns 80.1 per cent of Chrysler and 51 per cent of GMAC, formerly known as General Motors Acceptance Corp. before the automaker divested the majority holding in 2006.

GM and Chrysler aren’t the only automakers hurt by increases in leasing costs. Ford Motor Co. said last week that its credit arm took a $2.1-billion charge during the second quarter because of the drop in the residual values of leased trucks and SUVs.

Wholesale prices of used pickup trucks dropped 11.2 per cent during the second quarter, while wholesale SUV prices fell 9.6 per cent, according to U.S. National Automobile Dealers Association data.

[GregFarz78]

So in other words w/o incentives the standard lease rate is going to be high b/c the residual is crap right now and no one is going to lease a GM anyway

[AaronGTR]

Yeah, leasing is a waste of money anyway. Just like renting an apartment. "um yeah, how about I pay for this thing for 3 years and nothing to show for it at the end? Or how about I live here and pay for it but build no equity and never own it so when I move I get nothing?"

If I had the money right now I'd definitely look at a new GM car. They have a lot of stuff I like right now. I'd be looking to purchase though, not lease! I think people are too hooked on the new car every 3-4 years cycle. You need to drive something for 8-10 years if you're really going to get your moneys worth out of it if you buy it brand new. Thats what I did with the GA. Bought it new, paid it off in 4.5 years, had it for 8. Still in great shape and no car payments!

[Ajaxus]

But is leasing always bad? I seem to recall for awhile on here atleast a lot of people said lease to own was the best way to go for ownership..if you want to go that route..

[notsoaveragej0e]

Originally Posted by AaronGTR

Yeah, leasing is a waste of money anyway. Just like renting an apartment. "um yeah, how about I pay for this thing for 3 years and nothing to show for it at the end? Or how about I live here and pay for it but build no equity and never own it so when I move I get nothing?"

If I had the money right now I'd definitely look at a new GM car. They have a lot of stuff I like right now. I'd be looking to purchase though, not lease! I think people are too hooked on the new car every 3-4 years cycle. You need to drive something for 8-10 years if you're really going to get your moneys worth out of it if you buy it brand new. Thats what I did with the GA. Bought it new, paid it off in 4.5 years, had it for 8. Still in great shape and no car payments!

Originally Posted by Ajaxus

But is leasing always bad? I seem to recall for awhile on here atleast a lot of people said lease to own was the best way to go for ownership..if you want to go that route..

Comes down to cost/benefit analysis.

It all depends on the current deals and incentives, and your finance rate. In many cases in the past, you could pay substantially less over the course of three years for a brand new car that you can get out of before any problems develop. At the same time, the price you pay was usually less than what it would cost to buy the car, then sell it 3 years later yourself.

[AleroB888]

Originally Posted by Ajaxus

But is leasing always bad? I seem to recall for awhile on here atleast a lot of people said lease to own was the best way to go for ownership..if you want to go that route..

I don't know how it is in this modern era (heh), I leased a car only one time, a Saturn SC2 in '93... there was a lower monthly payment, I didn't want a 5-year obligation.... but my insurance cost was slightly higher because it was a lease.

[Ajaxus]

I forgot how old you are..

[AleroB888]

Originally Posted by Ajaxus

I forgot how old you are..

That's why I talk so slow..

[notsoaveragej0e]

Besides, leasing is awesome because you can beat the living piss outta the car, and by the time it gets ready to explode it isn't your problem. I ruined at least one trail blazer of my mom's that way- transfer case grenaded a month after the guy who bought it off lease got it.

[AMRAAM4]

Originally Posted by AaronGTR

Yeah, leasing is a waste of money anyway. Just like renting an apartment. "um yeah, how about I pay for this thing for 3 years and nothing to show for it at the end? Or how about I live here and pay for it but build no equity and never own it so when I move I get nothing?"

If I had the money right now I'd definitely look at a new GM car. They have a lot of stuff I like right now. I'd be looking to purchase though, not lease! I think people are too hooked on the new car every 3-4 years cycle. You need to drive something for 8-10 years if you're really going to get your moneys worth out of it if you buy it brand new. Thats what I did with the GA. Bought it new, paid it off in 4.5 years, had it for 8. Still in great shape and no car payments!

WOW...just wow. It's not about what Aaron wants in a car. It's about what a lessor wants in the car. Your beliefs are simply 100% wrong for the grand scheme of the "lease" idea. They can be right to what you believe in, but in the total picture, they're still wrong. Buying your car through financing doesn't make you any more of a "baller" than someone else, and depending on the circumstances, definitely not better financially. You buy things that appreciate (land, stocks, housing...for the majority over time), you rent things that depreciate. Your car verse rent example are 2 completely different paths for life. Yes, renting is dumb, houses will appreciate in the long run. Car renting is not dumb, all you are doing is losing money, so try and only dish out as much as you have to.....unless you want to drive that car for decades. Cars depreciate.

The evidence (even excluding interest paid): To buy the full $41,000 for a TBSS AWD out of pocket over 4 years and have it worth $10k when you are done shows you just p1ssed away $31k. And even then, that's just a number on the screen/book, you still literally dished out $41k in cash. After leasing the TBSS AWD for 4 years, when the lease is up you would have paid roughly $20k out of pocket and you can hand it back in no questions asked and get a new car. You saved over $10k in the value department. That's $21k in cash you saved out of your pocket, because you paid $41k in cash to have it worth $10k on a screen/book as a value. So, a person like me just saved myself $20k in pocket cash......................................that's how someone like me drives a TBSS AWD, and has a built RX7 as a garage ornament Not to mention, in 2010 or earlier, I'll have a new car replacing the TBSS If I really gave a sh1t about owning it, I would have financed it and paid it off by now.


Are you going to keep the car for AT LEAST 8-10 years??? IF yes, then it is 100% better to BUY, bad to lease. FACT

Are you going to buy the car out after the lease??? REALLY bad idea to lease at the beginning then. FACT

However, people who lease don't buy the cars at the end, because they know how to play the best financial game And that's why GM/Chrysler/Ford are in deep sh1t with leases. And as a final note, you say "I drive too many miles?" Guess what, with the terrible depreciation nowadays most times it is still financially beneficial to lease the car, pay the $0.10 per mile extra fee and you still make out better than a used car with a ton of miles.

Evidence: You have a leased '04 grand Prix for 15k miles a year. After 4 years you can have 60k miles. You turn it in with 80k miles after 4 years. You pay a $2000 penalty. If you had bought that car, you would have dished out more cash from your pocket to own it in 4 years, plus you would then take a heck of a lot more than $2000 of a hit on your trade in value

This is basic leasing and finance 101, everyone should understand this. If you don't, then be content buying your car and keeping it for a long time. But don't act like you are somehow fooling everyone because you financed to buy, rather than leased. It proves nothing about you.

[bigbenSC]

I leased a car that I didn't want for a long time: the G6

I bought a car that I will want to have around for a while: the SRT-6

Thats basically what it boils down to. Sometime in the next year, after the SRT is paid off I'm going to lease a cheap ass DD through work so I can keep miles off the good car.

[AMRAAM4]

Originally Posted by bigbenSC

I leased a car that I didn't want for a long time: the G6

I bought a car that I will want to have around for a while: the SRT-6

Thats basically what it boils down to. Sometime in the next year, after the SRT is paid off I'm going to lease a cheap ass DD through work so I can keep miles off the good car.

Bingo. You buy what you know you want to keep for quite some time. Other than that leasing is smarter, use it and dispose of it for as little out of pocket as possible. 99% of us on here are car people who will want the latest coolness in 3-5 years. We have accepted life with a car payment. Unless you know a dealer who will always give you payoff for your trade every 3-5 years, there is no way to do it cost effectively without leasing. And those dealers can't afford to do that nowadays with depreciation levels where they are. I am lucky in another way with the TBSS lease, in 2 years they HAVE TO take it back in this fuel economy. God knows the ass raping trade in would be in 2 more years with above average miles. I could see it being sub-$8000

[jaketuff]

Can't lease their ish, because now that the Gas Prices are jacked and people are not buying thier sh1t MPG suvs they can afford to lease anything. They are already unable to sell these pigs of the lot, Hummer is dead, so to lease them and even the cars they lose twice on the same ride!

OUT