Leasing, what went wrong?
Posted by christiancarguy on 2 August, 2008
This post was filed in Uncategorized and has 3 comments
The Lease is up at Chrysler Amid Horrific loses on residuals and the credit crunch.
Auto Lease write downs drive a 2.5 billion dollar loss at GMAC.
Ford posts a 2nd quarter 8.7 billion dollar loss, based on asset write downs largely due to Ford Motor Credit’s large lease portfolio.
BMW seeks to drop their lease penetration below 60%.
Honda Motor Co. said it expects falling residual values of big used vehicles in the
United States to shave another 25 billion yen from its operating profit in the year to March 2009.
What happened, what went wrong?
3 Comments on “Leasing, what went wrong?”
For years the Big three have pressured dealers to push leasing. Those customers who fell for it, found themselves deeper in debt and having to get another car at the end of the short term leases we dealers were asked to push, as short as 2 years they would need another car and go further in debt. It appears to me that the 7th Psalm explains what happened. Here is Psa 7 starting at verse:14 He who is pregnant with evil and conceives trouble gives birth to disillusionment. He who digs a hole and scoops it out falls into the pit he has made. The trouble he causes recoils on himself; his violence comes down on his own head.
The auto company’s financing arms (GMAC,CFC and FMC),counted on the SUV’s and beautiful large cars coming back off lease to be worth thousands more than the current gas stingy market is prepared to pay. Thus the horrific write downs that are pounding the auto makers…
What do you think????
Did they fall into their own trap???
IMHO, they forgot to calculate what the price of gas would be when leasing these monsters. People aren’t stupid, so when gas went over $4.00 a gallon recently, customers began dumping these gas hogs and going to more fuel-efficient cars.
Somehow the fed is involved in this gas price hike. You cannot convince me that this is not about conserving or speculation; this close to an election it’s political if anything.
Hear Obama telling us in his own words that he didn’t want gas prices to climb this fast……
“I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing.”
(click on link above)
Link did not appear in above post so here it is:
http://www.youtube.com/watch?v=Gehaf7_TBAs