Is this true?

You mean that with all the SUV’s coming back at values WAY below residual, they have NO ONE figuring out a way to sell more of these cars to the lease holders at better than market value?

It could be a tactic to generate month end business, and it could be factual.

Link to source please.

It wasn’t that difficult to find.

http://www.financialpost.com/story.html?id=680397

Happy Endings, that article doesnt confirm anything. Read it again. At what point does this story revert to wild ass rumor status?

I am really going to be shocked if the country’s largest automakers does away with leases altogether. If it does, I will officially get on the bankruptcy bandwagon.

My plan “B” is to wait for bankruptcy and buy a new Silverado for $8K cash…

Higher incentives and heavily subsidized loans. The usual story, but the incentives are going to get awfully big on some of those vehicles. Those 0% loans will seem even better when interest rates go up.

I’m not saying its good. Its a terrible idea. But GM isn’t going to sit on its ass and let 20% of its sales disappear. They will do something to try to get those sales. Might be balloon payments, might be a return to employee pricing, might be super long loans. It won’t be good for anyone. But they need to move that metal, and they will do whatever they can do accomplish that.

Which is why my 120 month loan idea isn’t as bad as you think. Plenty of business manage to loan money with less security and make money doing it. Others prosper collecting those debts.

Then you have litigation costs along with the fact that the buyer will most certainly bad mouth your product for a very long time. In the end the company definitely does not come out ahead.

It wasn’t that difficult to find.

http://www.financialpost.com/story.html?id=680397

It actually isn’t. The default rates would be awful, and the collection and administrative costs would be prohibitive.

They are better off just adding incentives so that they can shove them out the door with five year loans. They’d be better off still if they made cars that people wanted to buy at a higher price, but one thing at a time here…

Which is a better position to be in vs. a lease on a car that is worthless. Not an ideal situation, but this is GM we’re dealing with here. They are the masters at slowly stringing themselves out.

This is not going to happen because of the value of the collateral. A lot of cars simply can’t be expected to survive for ten years, particularly in a condition worthy enough of keeping as collateral for a loan.

Even these 84 month loans are pushing it. You could mitigate it somewhat with a higher down payment, but then what would be the point?

And trust me, just cause something is bad for the borrow won’t stop them from doing it in droves if it lets them drive a car that makes them look a couple of rungs up the socioeconomic ladder.

the logner the loan gave no advantage to the borrower. Look at the payment on 36 mths vs 48.
It doesnt go down that much , but u pay more for interests.
Leasing used to costs more than loans, but fierce competition drove rates down, Lease does have a higher inherent risk, as residuals can shrink with tanking economy.

Leasng is good idea for biz, salesman is the cheapest way to rent a car. Just residuals can be a big gambling.
Good products u never have to worry, IE Toyondaissans or any of the Panzer wagens.

Some said Banks had been flushed with deposits from Arab, China so they had to lend out money with lowered borrowing criteria. Now these big banks are playng debtors too, knock on the door of White house to get bail out .
Foreign banks also get choked too by buying these ABCP Asset backed commercal papers.

They were handing out loans to whoever has a pulse, your pet dog & gold fish could all get loans too.

THE PAYMENTS WOULD BE SOOOOO LOW!1! You could buy a Malibu for only 220 a month!

Planning for the future has not exactly been a strong point for banks recently. All that matters is generating business today.

I don’t know Michael sounds like a recipe for high default rates at year 5 of the loan and banks being stuck with cars and trucks they have to auction off.

Maybe people will simply have to buy what they realistically can afford instead of simply buying what they wished they could afford.

My truck lease ends June 2009 on my truck and they want $13k buyout [at that time it will be a 36k mile 2005 silverado 2500HD] – I think I’ll offer them $6k and see if they bite).