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AFFORDABLE LEASE DEALS IN LIMBO

Written by autoleasing  |  19. December 2000

The escalation of leasing that has fueled record sales in recent years is slowing to the pace of a medium size turtle. Scarce are the comfortably low lease payments that attracted so many eager buyers , relieved to avoid finance payments that seemed more like second mortgages , especially on large S.U.V.s. Big banks , finance companies and car manufacturers who all vigorously competed for you leasing dollar have substantially over projected lease end values ans are now reeling from losses that approach $11,000,000,000.00 ,that is correct Eleven Billion Dollars! Those projected values caled residuals exceeded actual values of vehicles returned at lease end. The average loss was $ 2,000 per unit. Often this significantly compromised or eliminated the lenders front end yield or profit. Fiscally dishartend some very large leasing lenders have withdrawn from leasing completley , GE Capitol , First Union , Bank of America and Bank One to name a few. On a brighter note car manufacturers , like the consumers they build for , have also been spoiled by the increase in sales a good lease program can generate . I believe other auto makers are likely to follow chryslers lead in offering jumbo rebates to be used in conjunction with lease programs resulting in more plausible payments with the bonus of lower residuals. Look for new incentives in the new year. Happy Holidays To All. by Joe Spirio

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