Ford's [De Facto] Exit From NA Leasing
While Chrysler and GMAC are cutting out leasing altogether, Ford is just raising lease prices on its sucky-residual trucks and SUVs to make them "lease proof." The Wall Street Journal reports Ford officials sent a memo to dealers Monday that said "due to extreme losses Ford Credit is taking on off-lease vehicles, it will be necessary for Ford Motor Credit Company to adjust residuals mid-quarter on the following vehicle lines." The memo specifies the Ford F-150 and Super Duty pickups, and the Ford Explorer and Sport Trac SUVs. They're raising lease prices so high customers won't agree to the terms. [NB: We've predicted this de facto exit from leasing for GM.] Last week, Ford revealed that average auction values for 24- and 36-month lease vehicles were down $2.7k and $2.4k each, respectively. In its recent financial statements, FoMoCo wrote-off $2.1b for leasing losses.
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They way the industry is going they'll soon have to pay the customer to take a car off their hands. No Sympathhy - ever increasing profits over the years and sweet f.a consideration for the public deserves what it reaps
Why ANYONE would buy a domestic branded vehicle at this point (unless the plan it to drive it for 5+ years) defies logic/common sense. The barely-adequate-2.8 no longer back lease deals on their own vehicles. They're all-but-screaming it from the rooftops- "Even we don't think our vehicles are a wise investment and their value will continue to plummet!" Meanwhile, a 36-month lease on a new Accord LX will run you $219 per month! =0
Why is GM or Chrysler going broke going to change anything? I still think it is inevitable and I still think it hold the potential to change the big 3 to something better than it is now but... ...but Chrysler went down a road similar to this in the 1980s. Now 20+ years later we are right back where they were back then. Have the big three not learned anything from all of this? Chrysler did not shed the unions, the contracts, or alot of dead weight in the management ranks did they? Clue me in - not very clear on the facts about Chrysler.
One way or another - leasing or buying new every three years is an expensive set of lifestyle choices.