The recent announcement by the car companies that they are going to stop leasing their cars and trucks, because of the unpredictability of residual values makes me wonder what that will do to resale/trade-in values of our cars.

Will that hurt sales of new cars leased by businesses?

 

I know that some American companies have discountinued Leases, because of the residual values, SUV resales, and ofcourse credit avaliability. But luxury car makers are still advertising leases (Benz summer lease event). Don't know when/if they will discontinue these.

Also, I don't understand your question at the bottom there.

 

Also, I don't understand your question at the bottom there.[/quote]

I guess what I was getting at is many businesses lease their vehicles as do individuals who write their lease off to the business. If the lease opportunities dry up, what will that do to sales. CPO cars could also become a thing of the past or at least until the financial crisis passes.

Yes I realize the high end market hasn't been hit yet, but isn't just a matter of time?

 

American car manufacturers got slammed with this maket climate . Big trucks + gas consumping vehicles + high lease volume + a three year gas price surge + a financial institution decline + weak dollar + X ( anything I forgot) = .

If the German car companies stopped leasing sales would fall but trade in would climb upwards in my opinion. Imagine if someone had to actually buy a 50K BMW 3 series instead of renting it for $550 a month or so . Case in point --the lease deals on an M3 are awful and those cars are languishing on the lots . If leasing stopped then the less common cars would go up in price and be even more elite in status .

The Porsche 997tt is a different type of car though. Most owners buy them , many buy them outright and they are not a dime a dozen type of car . Regardless of the economy Porsches sell . If Porsche stopped leasing 997tt's it can not be compared to these other companies . One thing I speculate will change though .. even the Porsches will go up in price and used cars will increase in value .

 

It's fun to speculate. If I were to believe the rabble rousers on the MS/NBC stock channel, the whole auto industry both foreign and domestic is in the tank.

 

I doubt leasing crisis in trucks/SUVs will affect high end sports car market to the same degree. Perhaps residual values in sports cars may take a sympathetic dip which would mean monthly payments would rise some...

 

Im of the opinion all cars sales are getting hit in the USA, same cant be said for the ROW. Ferrari, Porsche and to a lesser degree BMW are simply shifting production slated for the US to other countries where sales are growing.

Regarding leasing, only the auto manufacturers are pulling out of the lease game, that and a bank or two. There will always be financial institutions with lease programs but the leases are simply going to make less financial sense vs. buying - unless you run it through the business.

 

I don't think there will be any effect on PFS leasing.

 

i think it will effect leasing across the board for all brands. either the manufacturer will eat it (which the big three will no longer do) or rates will go up.

a saw an article that BMW is already experiencing wider losses from its residuals vs mkt values.

from what i have seen , leasing compromises a large percentage of sales for bmw, mb and Porsche. the democratization of credit is grinding to a halt.

 

Leasing will continue. With the values of cars plummeting beyond national averages, regular retail customers can no longer get out of their cars and into reasonable car payments with the increased negative equity. Most banks still advance MSRP and above in the leasing market and these programs will allow dealers to "unbury" their customers. Most recently Toyota Financial Services announced strategies to grow their leasing market.

Many banks have residual insurance- hence MRM values on higher end cars (maximized residual values). When I leased my E55 thru Chase they would only residualize up to 84k of the msrp even though msrp was 88k before gas guzzler tax. This was due to Chase's residual insurance company's cap.

 

60% of all BMW's sold in the US are leased. wow!

 

Larry is right - it was all over the national news again this morning that many banks are not lending on automotive leases right now. I am not sure how this will affect the luxury cars or what percentage are leased. The news mentioned that the American auto makers will be making it easier to purchase cars now with new incentives - obviously they need to do what they can to keep sales moving on the lots. I agree with the other Larry that many of us in Porsche's just purchase them outright and may have very little affect on Porsche. Our economic conditions are very interesting these days.

 

LOL Greta --Larry and Larry and I am not confused .

 

Yea, too many Larry's! Other Larry (Hummm3) is a neighbor and friend - good guy. Hopefully will meet you in person some day too! Hey with my new job I just started, I oversee all the way to Florida - maybe I will get down there one day!

 

Congrats on the job . It would be great if you make it to Florida.