GMAC Financial Services announced Monday that it will end subsidized forms of vehicle leasing beginning Friday.
North America's largest auto lender, which is owned by General Motors Corp. and Cerberus Capital Management LP, will stop offering lease deals that carry an incentive or discount but will instead offer one standard lease rate for all cars and trucks, company spokeswoman Gina Proia said.
The move comes at a time when many automakers and their financing companies are losing money on leases because of the sharp decline in resale values of leased vehicles, such as trucks and SUVs, in the face of record gas prices. GMAC's decision also comes on the heels of last week's announcement by Chrysler Financial to exit the leasing business altogether as of Friday.
More than 40 per cent of all vehicles are lease-financed in Canada. Consumers are walking away from their vehicles when the typical three-year lease period is over, and automakers are left with cars and trucks that are worth less on the market.
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North America's largest auto lender, which is owned by General Motors Corp. and Cerberus Capital Management LP, will stop offering lease deals that carry an incentive or discount but will instead offer one standard lease rate for all cars and trucks, company spokeswoman Gina Proia said.
The move comes at a time when many automakers and their financing companies are losing money on leases because of the sharp decline in resale values of leased vehicles, such as trucks and SUVs, in the face of record gas prices. GMAC's decision also comes on the heels of last week's announcement by Chrysler Financial to exit the leasing business altogether as of Friday.
More than 40 per cent of all vehicles are lease-financed in Canada. Consumers are walking away from their vehicles when the typical three-year lease period is over, and automakers are left with cars and trucks that are worth less on the market.
Read full story
How will this affect your decision when it's time for a new vehicle?
More...