One of last year’s most troubling blows for the American consumer was the decision by GM (later mimicked by Chrysler) to stop leasing its vehicles. With most people unable to obtain financing for new vehicles, the disappearance of a leasing option undoubtedly weighed on 2008’s troubled automotive market. Following the recapitalization of GMAC and its transformation into a bank, however, GM is considering coming back into the leasing business.
“We’re looking to re-enter the leasing business on at least a limited basis at some point in 2009,” said GM sales chief for North America, Mark LaNeve. LaNeve said he thinks the days of cheap leases to drive up volume are over, calling it bad business. GM would like to see leasing become 5 or 10 percent of sales, rather than 20 or 25 percent.
GM COO Fritz Henderson said GM’s inability to lease late last year dramatically hurt its sales. “We were constrained on what we could do on APR, just in terms of regular retail financing. We actually have made some progress in terms of being able to get back in the game not just with GMAC, but with credit union activity that we put in place. We think we made some progress to solve that APR, but we haven’t solved the leasing arm yet.”
LaNeve said GM has been out of leasing for almost 6 months. He did not give a specific date when the automaker would return to leasing. However, since being granted status as a bank, GM’s financial arm, GMAC, has eased back some of its standards for vehicle loans, easing some of the difficulty in obtaining new car financing for prospective buyers.
Source: Automotive News