Canadian Personal Finance Blog

Archive for July 30th, 2008

Leasing Cars a Thing of the Past?

I have commented previously about why I do not lease cars, and it is mostly because it becomes cyclic and you never have your debt paid off, because you end up getting a new leased car.

It seems our firends and General Motors agree with my view on this. This is not actually true, but as of August 1, you will not be able to lease a GM car from GM any more (I am sure there will be leasing companies out there somewhere, but not directly from GM), instead GM will offer you a 6 year ZERO-Interest loan to take their car home with you.

Why? Resale value of Vans, SUVs (or is that SUKs?), and other monster gas guzzlers is such that leasing has actually become a money losing concept for GM (or someone has figured out it soon will be).  Interesting to see if other large North American car makers will follow suit or not, but the only problem with a GM Lease OR zero-interest loan is, that at the end of it, you still have a GM vehicle (speaking as the owner of a Montana VAN).

Evidently Chrysler in the U.S. is also following suit and will be withdrawing from the Leasing business as well.

Right now, I have to pay off my used Toyota Carolla, but that is about it. I drive cars until they are DEAD and then wait 6 more months after that, so leasing never made a lot of sense to me (I used to drive a 12 year old ‘72 Dodge Dart with black vinyl interior, so no, my car is not an extension of me (or maybe it is)). I am not sad to see leasing, go the way of the “Great Awk”.

Is anyone upset that they won’t be able to lease directly from the manufacturer any more?