Leasing loses its lustre in market turmoil

Posted by on Jan 25, 2012 in 8th Article | 0 comments Plummeting residuals means cash is king for many automakers. There’s been a lot of speculation over the past nine months about automobile leasing going the way of the dodo, but in reality, leasing – preferred by the majority of new-car shoppers a decade ago – is still garnering a considerable slice of the Canadian car market. While it’s true General Motors and Chrysler have dropped their leasing programs, every other manufacturer is still in the game – although some would rather not be herunterladen. Auto broker Mark Derry, of CarSense.to, believes lease deals are definitely more expensive than last year and some automakers are dissuading customers from leasing. The reason? Plummeting residuals – the remaining value of the car at the end of the lease – are playing havoc with profitability. “Companies are terrified of the market and don’t want to lose on lease returns,” Derry says gta rennen herunterladen. Leased vehicles (especially gas-swilling SUVs) are frequently worth less at the end of the contract than predicted, leaving the automaker’s finance arm to absorb the loss once the vehicle is sold at the present, lower market value. Even vaunted nameplates aren’t immune to falling residual values, leading to higher lease payments than Canadians are accustomed to. “Strong residuals among popular Japanese models are down 4 to 5 per cent,” Derry says download netflix app movie. “Toyota has slipped from 48 per cent retained value after four years to 42 per cent – that means the customer has to pay more of the vehicle’s value over the first four years in their monthly payment.” Some automakers, especially the luxury brands, continue to advertise attractive lease rates, says Derry, because the prime rate companies pay is at a historic low. Given the stark economics of leasing, it’s no surprise leasing has taken a back seat to financing. Chris Travell, vice-president of Maritz Research Automotive Group, says automobile leasing in Canada has plunged from a peak of 54 per cent of all new-car transactions in 1999 to 42.5 per cent in 2005 and just 32.3 per cent in 2008 dota 2 ohne steam downloaden. “I wouldn’t be surprised to learn leasing has fallen below 30 per cent of new-car sales right now,” says Travell. “The credit crunch has accelerated the drop in leasing.” Some automakers stipulate punishing lease rates to deter consumers and to cover future losses. “Ford is offering some lease...
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