SUVs aren’t the only vehicles affected. As someone else here pointed out, resale values for luxury cars are also in freefall. One of my panel members turned in a BMW 545i even though BMW offered to knock $5,000 off the price if he paid to keep the car.

Third party lessors MIGHT be in a better position. A friend tells me that they usually buy insurance to cover lower-than-expected residuals. But even if this is the case, how high must the premiums on such policies be now?

I’ll get us started with a few:

“The open, open, really open-ended lease.”

“GM. Making leasing history. Um, we mean ‘making leasing, history’. ”

“GMAC: you lease it, you bought it.”

“GM: would you like to finance, or, um ‘rent-to-own’?”

I think that is a great idea. GM should not sell any current models in the rental market — just extend the previous generation model’s production. For example, GM could have just kept pumping out the last-gen Malibu for a few years to sell to Hertz.

Even my Prius, although it doesn’t quaff as much in normal driving, and not at all at traffic lights or when I’m going downhill or with a tailwind.

But I still put 9+ gallons in it yesterday, after only 430 miles during 8 days of driving. That’s still a quaff in my book.

I’ve never liked the term “fuel sipping” when applied to cars.

How did they stay 1,2, & 3 in America as long as they did? By over producing, discount selling, and brand trashing? It took this latest fuel crisi to push all three of them over the brink. Perhaps the big banks this time will not go to the brink as they did with housing, and cut off this foolishness. The bloggers know the reasons (above stated) why the residuals are weak. Do they know that other than the last unexpected hit with the trucks & SUV’s the weak residuals were all published early by the rating companies. It was not a guess that many of these big three leases were losers at the outset.

But, when you have to run your plants to satisfy contracts (supplier & union) and you are say 50% bigger than your real sales, these “cheap leases” and the ever present cash back offers are needed to clear the dealers lots so that you can do what? Do it all over again. Now this is madness.

The Japanese brands have consistently done best in the first category, but in recent years the domestics have really caught up (and in some cases even matched with the recent JD Power surveys equalling Ford in quality with Toyota).

Chrysler getting out of leasing is a no-brainer, as the company doesn’t really make anything that fits well into the high-residual mold, GM, however, it seems should just limit the models it allows leases on. Stop leasing trucks and most SUVs, as well as the cars that are overall not competitive (Cobalt, HHR, Impala, G5, etc) but keep them on the vehicles that, while not being top notch, at least should be able to hold decent value due to either selling well or being overall solid cars (Malibu, Enclave, G8, CTS, etc).

The biggest thing though, stop dumping tons of cars off to rental fleets. IMO each of the big three should make rental exclusive models that aren’t sold through the retail channel, that way when those are dumped back onto the market it doesn’t hurt the value of those sold through the lots.

The Japs make solid cars so the resale is going to worth a certain values. Basically they dont depreciate much either.

When the car does not worth the residual, Leasing co. has to make up the short fall. Thats not funny anymore.

I now sell Hyundais, and they really don’t bother much with leasing – for obvious reasons…

It can clearly be said, unless a car is desirable (hot) during it’s initial sales it has no chance of having any acceptable resale value. When it comes to hot brands, the domestics can count them on one hand. Then a second thing seems to happen. With no tenacity (ability) to build brands over many years, even the hot models begin to cool.

Let’s see, the first CTS Cadi’s, Chysler 300, Ford Mustang, chrysker PT cruiser. They just don’t have the staying power of an A brand Japanese or top German car. They are not desirable in the used market, probably because the new buyer does not long for a new one of these models and is not willing to accept the next best thing a used poorly selling car.

This trend was evident long before the new gas “crisis” but was well hidden by the trucks and SUV’s which both made money and kept the most resale value of any domestic models. Take away this foundation block, and the rest of the domestic model line is a house of cards.

Just retooling to build small cars does not assure the American consumer will still not prefer the foreign products for the same reasons: strong branding, high resale, good reliability.

If the domestics have to go out on a discounting frenzy for $15K cars profits will not exist. Will the clock run out on Detroit while they are busy catching the competition in this new marketplace?

It’s all in how you present it.