#BankLeases

Automakers are throwing everything they currently have at the wall to see what sticks. The concept of “mobility” is now so broad that it encompasses automation, electrification, vehicle connectivity, alternative modes of transportation, driving aids, ride-sharing, ride-hailing, and even subscription services — and plenty of companies are giving them all a shot.

Last week, we talked about Volvo’s new car subscription service. Most of us had difficulties rationalizing the price based on how the product is being offered. A lot of companies are testing those waters right now, especially luxury brands. Lincoln recently launched a subscription initiative that is extremely similar to Cadillac’s, and Porsche has been buzzing about its own “Passport” service. However, mainstream brands like Ford and Hyundai are also trying their hand — albeit very differently.

Okay, I admit: I subscribe to the Wall Street Journal. It’s not really for me; Mrs. Baruth works in finance. (Without which, as you pimps and players out there should know, there’s no romance.) Rarely do I read the whole thing. This past Saturday afternoon, however, I broke the pull-cord of my son’s TopKart. Then he ran out of gas for his motorcycle. Which consigned us both to an early afternoon inside the house, because I was too lazy to address either situation.

Imagine my surprise to find an advertisement for an independent leasing agent in the last of the Saturday sections, back among the lifestyle articles and the usual Dan Neil attempt to sound like a more fey version of Oscar Wilde. Those members of the B&B who were born prior to the release of “Appetite For Destruction” will remember that stand-alone leasing shops were once very big business. They bought their cars from franchised dealers, often well after they’d obtained the customer’s signature on their own paperwork, and they relentlessly cross-shopped banks for rate and residual deals.

Often, these firms focused exclusively on members of the professional class; the big hitter in central Ohio during the ’80s was un-self-consciously titled “Physicians Leasing Co.” They were largely driven from the field by the beginning of this century by aggressive captive finance providers like BMW Financial. The tendency on the part of most banks to view the end-of-lease termination process as an additional and very lucrative profit center, a tendency that became more exaggerated as the prime rate fell and banking profits sank accordingly, didn’t help their business model one bit.

Nevertheless, here we are, in $THE_CURRENT_YEAR, with a manufacturer-agnostic leasing company advertising in the WSJ. So let’s see what the deals are, and what lessons we can learn from looking at them.