Inability to offer leases is killing Big Three volume - Tom Walsh, DFP auto columnist

[Bozita]

http://www.freep.com/article/20090313/COL06/903130413/Detroit+3+must+find+way+to+lease+

March 13, 2009
Detroit 3 must find way to lease

BY TOM WALSH
FREE PRESS COLUMNIST

"I have to write you because this is driving me crazy," Mitchell Lipton began his e-mail to me.

"I have spoken to three people in the last three weeks that wanted to drive American cars. However they ended up buying foreign because they couldn't lease an American car for anything that resembled a reasonable price," he continued.

Lipton, executive vice president of Friedman Real Estate Group in Farmington Hills, hit on a sore spot for the Detroit Three automakers. In the slump now pinching car and truck sales in every country, the Detroit brands -- especially General Motors Corp. and Chrysler LLC -- have been especially hard-hit.

One reason is that leasing has nearly evaporated as an option for shoppers at GM and Chrysler dealers, while Ford Motor Co.'s leasing volume has dropped sharply. Competing foreign brands continue to offer attractive lease rates.

Lipton cited two examples:

One employee of his looked at a Ford Fusion and a Volkswagen Jetta, similar cars from a purchase-price and fuel-economy standpoint. The Jetta lease was quoted at zero down and $220 a month, while the Fusion was $340 a month, Lipton said, adding, "He had no choice but to lease the Jetta."

A friend, Lipton said, wanted to lease an SUV. Every comparable American SUV was much more money than the foreign brands. "She just picked up her new Range Rover," Lipton said.

-snip-

A year ago, according to one sample of data for a variety of U.S. markets, GM, Ford and Chrysler outlets reported that leases accounted for more than 25% of volume. But last month, leases dropped to zero at the same GM and Chrysler stores and to only 10% at Ford stores.

Leases still account for more than 30% of Honda and Nissan sales in the same sample.

-snip-

more...

[Nicholas D Wolfwood]

1. This is actually very true.

I've had co-workers and my parents both very recently look into leasing an American car. They only want to sell - no leases. And since leasing is the only option that truly makes financial sense if you drive < 15,000 miles per year...

[Demeter]

2. Result of the SUV Bust

When gas soared, SUV owners turned in their vehicles, and the companies had tons of useless unwanted used SUVs.

[Dr.Phool]

3. A friend of mine has been leasing Chrysler or Jeeps for years.

He turned the last one in, in November, and the only "American" car he could lease was a Chevy Malibu at an enormous rate.

He leased a Subaru.

[crimsonblue]

4. leasing cars is idiotic.

A lease is investment-negative, and the return for your money is non-existent.