By on July 31, 2008

Never thought I\'d ever have to pay so dearly, for what was already mine... (courtesy a123.g.akamai.net)We've just heard from our sources that GMAC is about to announce that it will no longer offer lease deals on the Yukon, Yukon XL, Suburban, Tahoe, all full-size trucks, Envoys and TrailBlazers as of tomorrow. The General's captive finance arm will also raise the "money factor" (the leasing rate) on Cadillacs by two percent. Needless to say, this will be an enormous blow to GM's sales. We're told that GM has called a meeting of all mid-western dealers at the Rock Financial Showcase for the same day, [presumably] so that marketing maven Mark LaNeve can announce the incentive deals that will replace leasing. We also hear that GM is about suspend employee pricing on most car lines, such as the Chevy Cobalt, in order to make money where they can. We'll have more info as we get it. [hat tip to you-know-who-you-are]

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19 Comments on “TTAC Called It: GMAC Ceasing Leasing Tomorrow. Employee Car Discounts Next to Go?...”


  • avatar
    paradigm_shift

    Man, if GM dealers have a glut of trucks and SUVs on their lots now, this is only going to make things worse…

  • avatar

    A 2% increase on the money factor is huge, pretty much negates the best part of leasing. Then again, with 0% financing for 60+ months (that’s still going on, right?) on a purchase its not such a big deal.

  • avatar

    Sajeev,

    Last time I checked, that was the incentive on the CTS.

  • avatar
    snabster

    Saab?

  • avatar
    nevets248

    “black Friday”, here we come. will be curious to see what spin LaNeve puts on this slow motion train wreck.

  • avatar
    N85523

    Holly crap!? You mean to say that I will not be able to lease a that gorgeous Trailblazer that I’ve had my eye on for weeks after next Friday? I better get down to my Chevy dealer quick!

  • avatar
    SherbornSean

    N85523,
    Or, you could go to your local SAAB dealer and get a 9-7x, although you’ll have to bend slightly to get the key in the ignition. Or maybe you could visit the local BPG dealer and see if there are any Buick Rainiers or GMC Envoys left. And if you are really lucky, maybe you can find an Oldsmobile Bravada to lease.

    Dealers are standing by to take your order….

  • avatar
    jaje

    Honestly…I’m not sure why GM didn’t do this long ago. You can only have so many clearance sales (seems weekly!) for so long before these bad business practices come to roost. GM makes too many cars and trucks than the market wants – plain and simple. They’ve been stuffing every channel – doing every pricing gimmick – putting all their customers upside down with trade in values – stuffing every fleet channel – selling cars to credit risk customers – having these fire sales every week, etc. for the past 8 years. It has to end as you cannot sustain literally selling your over produced wares for a loss (b/c you have to discount them entirely too much).

  • avatar
    opfreak

    called it?

    is there a difference between ‘ceasing leasing’

    and ‘ceasing leasing on a few models’?

    apparently not anymore.

  • avatar
    Lichtronamo

    The bigger news may be cutting GMS pricing – you have to wonder how many sales GM generates from within. In my experience, GMS pricing not only leads to sales, but more frequent sales as the beneficiaries are able to trade cars more often.

  • avatar
    frizzlefry

    Wow. They just don’t get that they are losing money because no one wants their garbage product. Making them, in effect, more expensive sure ain’t going to make GM more money. The fact that GM vehicles are usually much less expensive then their japanese and german competators (for good reason) was the only real selling point.

    Raising the rate for Caddys by 2% is pretty stupid considering how cheap a lease can be for a BMW.

    Dummies.

  • avatar
    Redbarchetta

    OK so GM stops the leases for the fatass trucks on the first of the month. Then at the end of the month when they haven’t sold any and the ’09 are about to come the super fire sale starts, smart. Do these executive think more then 15 minutes in advance, haven’t they leaned that almost all their snap and react ideas backfire bigtime on them. Looks like the Labor Day toe-tag sales are going to be huge this year. So goes the GM rollercoaster ride of sales.

  • avatar
    NickR

    “black Friday”, here we come

    Oh yes, it’s the end of the month. Yes, it will be interesting to see how the figures shake out this month. I think a great many manufacturers (aside from the GM, Ford, and Chrysler) had a nasty surprise. In particular, I see Nissan suffering badly.

  • avatar
    jkross22

    Should I bother waiting on that CTS wagon that was supposed to come out in 2010, or scoot on down to Caddy and lowball the shit out of a manual CTS?

  • avatar
    jwltch

    I’ll be interested to see how bad July was. The local Chevy dealer is still prominently displaying trucks and SUVs. You can’t even see the Cobalts and HHRs because of all the trucks right in front. Makes no sense to me. Until these last few articles on TTAC, I never realized that so many people lease.

  • avatar
    netrun

    @opfreak: dude, let it go!

    +2% on a Caddy is a LOT of money! That’s like +$60 a month without getting the navi!

    Might put a crimp on sales, not good.

    And I don’t think leasing is coming back. Cerberus via GMAC won’t let them throw any more money out the window while they call the shots.

    Anybody still think it’ll take Red Ink Rick three years to slow down truck production? I think there’ll be suddenly all sorts of ways to shutter/stop production. Heck, the cost of renting space for all those trucks will soon exceed the value of the trucks themselves!

  • avatar
    Jimal

    Hmm… My dad is a GM salary retiree (non-union) so I’ve always had a soft spot for GM cars. I’m in the market for a new car to replace my Golf, and since it would at least symbolically help my dad’s retirement, I was thinking of the new Cobalt SS turbo sedan when it comes out later in the year. First, GM cancels his healthcare, and now they’re going to cancel the employee pricing?

    That employee pricing was the last reason I had to consider that Cobalt, or any other GM product.

  • avatar

    GM has lost over $50 Billion since I first called for Wagoner”s resignation. the man is a crook. the UAW has been bought and paid for. the dealers are an endangered species. and Wall Street banks are succeeding in their quest to relocate an industry and rape the middle class. too many blind followers and sound asleep fools.

    how much worse does it have to get before people wake up and realize there is a reason GM management refuses to listen to their best salesman of all time? the American public just doesn’t get it. wouldn’t listen to Ron Paul about the value of US currency and foolishness of a war that can’t be won by a greedy military/industrial complex hell bent on feeding off an out of control, privately owned, printing press called the Federal Reserve.

    GM’s Board of Bystanders doesn’t want to win anywhere near the present time frame. they could never get away with this crap if cars were selling. WAKE UP PEOPLE! It’s time for a revolution and I’m in the mood to lead one.

    more soon from your friendly neighborhood Buickman…
    __________________

  • avatar
    SAAB95JD

    Man, if GM dealers have a glut of trucks and SUVs on their lots now, this is only going to make things worse…

    Not really. Since GM owns GMAC they are negatively exposed to the hideous resale value of their own products. Since they cannot give them away new, the used “end of lease” residual value will be so low they will lose money again.

    This is actually kind of a smart move.


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