Comments on: Ford, GM to hike lease rates due to losses as residual values fall

By: BuyAmericanOrLeave

BuyAmericanOrLeave — Thu, 31 Jul 2008 15:29:16 +0000

Gm is in big trouble. Chryler is in even worse shape. I know for a fact Ford will be the 1 out of the big 3 that will prevail.

By: xyunya

xyunya — Thu, 31 Jul 2008 14:38:22 +0000

trantz, I own my own company and lease only through it. I haven’t bought used car since graduating from college, and it was probably before you were conceived (nothing personal – I am old). The lease does not make economic sense. It is a perfect way for a professional or business owner, for individual it is not the most cost effective. Look on msn or cnn business pages, I don’t need to explain why buy is cheaper then lease – they’ve done it.
If you own a business and your business leases a vehicle for $1000/month plus it pays $300 insurance and $200 in gas. Per IRS rules you must declare 20% of business lease as personal use: $1,500*.2 = $300 monthly income. Remaining $1200 are ordinary business expanse. subject to ordinary business taxes (in my case near 50%). As a result I can drive very nice Lexus for only $900 total outlay a months (including ALL costs). After 39 months insurance goes down, the price of car is about half of original and I can buy it for personal use. It is even less expensive to buy and lease to your own business, but cost of accountant offsets that benefit .

By: trantz

trantz — Wed, 30 Jul 2008 23:47:24 +0000

I just got out of my Escalade lease… I would never purchase a new vehicle. $41,000 residual sold for at the auction for $31,000. Not my hook. Also, I am a GM dealership employee that finances and lease vehicles to customers. Those who say “never lease” are those who buy used vehicles anyways. xyunya, you are absolutely wrong about leasing versus buying, unless you are comparing leasing a new vehicle to purchasing a pre owned vehicle. You are wrong for so many reasons I do not care to discuss. Wells Fargo pulled out of leasing… just Chase and Bank of the West that offer non-captive leasing as far as I know. We’ll see how that goes. Read someone said GM residuals never were good anyways. Just leased a $35,000 Ext Cab Silv 1/2 ton 4X4 LT1 to a customer, $259 / mo for 39 mo’s no money down no security deposit. ****, that is cheap I don’t care who you are.

By: DeansterTJ

DeansterTJ — Wed, 30 Jul 2008 22:43:52 +0000

KTULU WHY ARE YOU ILLITERATE YOU ****ING GOOCHMONKEY?! USE A SPELL CHECKER ASSHOLE, I GET MIGRAINES READING YOUR ****ING ****

By: xyunya

xyunya — Wed, 30 Jul 2008 18:53:19 +0000

^^^ that’s actually the second rule. The first one is don’t lease if your company/practice is not paying for it. It is cheaper to buy.

By: Random Jerk

Random Jerk — Wed, 30 Jul 2008 17:51:54 +0000

Number 1 rule of leasing is don’t lease longer than the factory warranty.

By: ktulu

ktulu — Wed, 30 Jul 2008 17:23:49 +0000

Not gonna work.
They shoulsd stop the 24-36 leases, and srart the terms at 39 months. ZGet back moist of the depreciation.

It ios a way 4 people 2 buy a vehicle that is 2 expensive., but ther R some circumstatbes when wyou van make it swork. (i.e. “it’s an opportunity to downsize to a smaller vehicle without suffering the losses incurred while trying to sell it.”)

UI think the banks R shy after gett8ing burned on bad home loans. Tbshe “hisgh-reisk” borrowers R going 2 have 2 go to the local loanshark dealers, and pay $350/month 4 72 months for a 2002 hondo R After this downturn in the economy, there are going to be a lot of people that these b

they try 2 punish all future customers, but I think many will simply gi elsewhere

By: The Stig

The Stig — Wed, 30 Jul 2008 16:53:36 +0000

Hilarious. They lease a wave of trucks and SUVs and when the lease is up the financiers can’t flip the vehicle for at least the residual value. Instead of taking this on the chin like other investors/businesses in an economic recession they rewrite their rules and punish all future customers. Utterly brilliant strategy guaranteed to bring in new customers in droves.

Of course the customers who have leases expiring on trucks and SUVs are golden because it’s an opportunity to downsize to a smaller vehicle without suffering the losses incurred while trying to sell it. This is just one of a number of advantages leasing offers – you don’t own the vehicle. And if you think about it carefully, you probably don’t want to anyway.

By: brassmonkey

brassmonkey — Wed, 30 Jul 2008 16:42:09 +0000

Chrysler, too. The Big 3 are increasing lease rates? I never knew the residuals were good enough for a lease to make sense on an American car anyway.

By: johnnycanuck

johnnycanuck — Wed, 30 Jul 2008 15:50:41 +0000

I guess none of their own employees can expect to qualify.

By: desertdweller

desertdweller — Wed, 30 Jul 2008 15:44:55 +0000

Leasing has run it’s course. It was just another way for people to buy a vehicle that was too expensive anyway. What worries me is the statement from Ford Credit saying that they were going to take on less high risk customers. After this downturn in the economy, there are going to be a lot of people that these banks consider high risk. Who’s going to sell them a car? Are they going to have to settle for a POS for the corner lot that finances they’re own loans?

By: Fletch

Fletch — Wed, 30 Jul 2008 15:25:18 +0000

And the market for trucks continues to shrink.

By: mayer_ray_nagin

mayer_ray_nagin — Wed, 30 Jul 2008 15:23:36 +0000

Lease’s are why “everbody who is anybody’s secretary in LA drives a BMW.”

By: xyunya

xyunya — Wed, 30 Jul 2008 14:44:22 +0000

It is a reasonable approach for GMAC and it will hurt GM. It is common sense actually: if you can’t afford payments you should drive THIS vehicle.

By: RSPINAJR

RSPINAJR — Wed, 30 Jul 2008 14:38:44 +0000

In some areas of the US, like the northeast, leasing is way more than half of all sales. Those dealers have a tough road ahead.

By: chester

chester — Wed, 30 Jul 2008 14:09:47 +0000

Do ya’ll think this is a step in the right direction? or a bad move.