If this isn't a sign of which of the Big 3 is going down the hardest and fastest, I don't know what is:

Chrysler suspends new car leases - UPI.com

 

Last time I looked only a shade more than 1 in 10 vehicles is leased.
Off lease vehicles just got worth a whole lot less. Ask ford about their 2 billion dollar write down on the value of their off lease vehicles. If chrysler can save a billion dollars on depreciation I think it might be a wise idea.
I dont know if youve ran a business but some things are just a bad idea financially. If a vehicle is worth less after the lease than you got paid during you have lost money. It is foolish to continue losing money unless there is some very important reason to do so. Such as, toyota prius's are probably sold as a loss but they make toyota look green so its ok to lose a little money on 150k units if it increases overall sales on their other cars.

 

Well now a days its gettin up to the point where the big three at one point were thinkin about merging. Ford and Gm were thinkin of contributing thier suppliers to eachother. There had been a real big write up in the wall street journal about this.

 

They gonna wait til toyota and honda have 60% of market share?

 

They did it to get people into a more expensive car or truck and keep the payments low. Also, a 3 year lease gets you back into the showroom for another one, unlike a 5 year note. Companies like BMW can pull this off because residuals are something like 75 percent at the end of 3 years. Look at the residuals on a Sebring (or Sable). They are dismal, 30-40 percent, so no leases. Residuals on SUV's suddenly dropped, leaving whoever holds the paper, not the customer, in trouble.

Jim

 

Wow, think of the possiblities, I could get a F-450 with a CTD latched onto an Allison. If that doesnt give a big rig guy a hard on nothing will.

 

Somebody has to explain why leasing a vehicle for a business is so good. If I buy a vehicle outright for my business I can still write it off and set it up for depreciation like any other business asset. Then I can sell it once its paid for if I want.

Leases always seemed like a rip off to me anyway. Maybe if your car dumb and want to drive new vehicles all the time its good. But for me its a rip off.

 

I think you have to depreciate the vehicle over 5 years so the deduction would be spread over a long time while the lease cost is 100% deductible. That's what the company I worked for told me when they went to leasing after the law changed. We replaced our vehicles every 2 years so leasing was the only way to go taxwise.

 

It all depends. We have completely depreciated vehicles in the first year.... just depends on how good your accountant is .

 

Yeah that is true the depreciation is spread out. For me though a 5 year depreciation term isn't too bad. A vehicle even beat hard should be able to easily last 5 years. Swapping vehicles every couple years just seems like waste to me. Constantly making payments is not for me either. With the leases you got to lay out cash up front if you don't have a trade then you have to pay for every dent or scratch on the vehicle before you turn it in. I don't know how they would handle leases on a work truck that gets all beat to hell both inside and out. Well enough of my

 

You've been able to get F650's and F-750's like that for years...

 

Yup, being married to a payment for your whole life while never getting anything substantial back other than the right to use something for a specified time seems dumb. It would be like paying 2 grand for a mortgage your whole life and giving them the house back at the end.

 

Some people never buy a house and rent or lease their whole lives. Its a financial choice. The monthly payment is lower, but you never own it. There can be a vaild argument made for never financing a depreciating asset (car or truck). I pay cash now, but when younger could not do it. If I wanted a to drive a new BMW bad enough, then I would lease.

Jim

 

Depends on the rate of depriciation vs the lease payments. Ill give you my last diesel truck as an example. I bought the truck for $20,700 dollars used. I drove the truck 60k miles in 2 years and sold it for $19,000. So the price of ownership for 24 months was 1700 dollars + another 1700 in interest on the loan. In other words it cost me about 140 dollars a month to own and operate this truck. If I can lease a newish vehicle for $140 dollars a month for 2 years sign me up. I didnt have to put a down payment on the truck and it didnt have to be perfect when I sold it. I put it on a consignment lot and it sold in 3 days flat. By the time I got out of this truck I had 12k in equity so on the next truck I wouldnt need to finance the full 20k. Interest goes down considerably but the depreciation remains fairly constant. So I can get my cost of ownership under 100 dollars a month.

 

Chrysler has suspended all their new vehicle leases, car & truck.

GM suspended all their leases (car/truck) several days ago.

Ford just announced they are raising their lease prices on F150 & Super Duty pickups, Explorers, & Sport Tracs.

According to the Wall Street Journal, Ford is raising the prices so high, most ppl will not agree to the terms.

In recent financial statements, Ford wrote off 2.1 billion dollars in lease losses.