GMAC Officially Kicks Leasing To The Curb

GMAC Financial Services, the nation's largest auto lessor as recently as midyear, virtually has stopped writing leases in the United States.

In September, leases accounted for less than 2 percent of General Motors' U.S. new-vehicle sales, according to J.D. Power and Associates. A year earlier, Power noted, GM's leasing rate was 16.8 percent.

Automakers and dealers use leases as sales tools for customers who seek lower monthly payments and a way to cover negative equity in their current vehicles. But the credit crisis forced Chrysler Financial to exit the leasing business this summer, and other lenders have cut back sharply on leasing.

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dtrotter54 - 10/6/2008 3:49:51 PM

+2 Boost

GMAC has been setting residual values unrealistically high for a decade. It was just a matter of time before they realized that it is not good business.

Maverick2020 - 10/6/2008 6:37:08 PM

+2 Boost

This is a whole lot of not good.

GM needs every sale it can muster; if 15-20% of its sales have traditionally come from leasing, many customers are going to sit on the sidelines or move to a competitor whose captive finance arm can finance them.