GM Marketing Maven Mark LaNeve's GMAC Email to Dealers
To all U.S. Dealers:
The announcement last week that Chrysler was discontinuing all leasing in the United States was big news and widely covered. You may also be aware that Chrysler had previously announced the discontinuation of incentivized leasing in Canada. Yesterday, GMAC in Canada announced it will exit incentivized leasing on August 1. Further, it is worth noting Ford Motor Company and Honda Motor Company recently announced they were taking an impairment against their lease portfolios. Suffice it to say, numerous factors are driving up the risks and costs of leasing and therefore, it is coming under increased scrutiny across the industry.
All of this has prompted numerous inquiries from our dealers regarding GM vehicle lease business in the United States.
Obviously, current financial pressures will continue to affect our perspective on leasing. That said, while we obviously can't make guarantees, we are in the market today with competitive programs to make GMAC leasing more affordable and plan on continuing to offer this financing alternative as part of our August incentive play on '08 and '09 models (with some adjustments and exceptions).
Over the last few years and months, lease vehicles have become a smaller percentage of our sales, and we do see this trend continuing due to the relative high cost and risk compared to traditional cash or APR business. This is why we offer a balanced menu of cash incentives, APR and leasing programs to make GMAC financing an affordable alternative on almost every product in our lineup.
Rest assured we will make every effort to stay aggressive in this hypercompetitive market.
Thanks for your support.
Vehicle Sales, Service and Marketing
Lynn Ellsworth on Jul 31, 2008
In the U.S. leasing makes life simpler for small businesses. Figuring depreciation on buildings, equipment, furniture, computers, and vehicles is a night mare under the IRS rules. So many businesses like to lease anything they can because the lease expense is much simpler to enter when filling out their taxes. Of course small businesses also like to lease because they often don't have the money to buy things and they aren't sure their business is going to survive.
Robert Russo on Jul 31, 2008
Small businesses owners love leasing luxury vehicles because they can lease them through their company leaving a really low residual value, let the company deduct the lease and then buy the car personally at the lease's end. If GM does kill off leasing in the US (which I thought they did) it would kill Suburban (probably already dead), Corvette, and all Cadillac sales. Chrysler doesn't really have any luxury vehicles that fit this bill after killing off the Viper. The challenger is too new and shiny to suffer because of this, but if the funk doesn't clear up soon, Chrysler's day are numbered regardless what miracle cars they come up with.
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