Will GM's Return to Leasing Create a Mini Clunker Invasion?

With the disintegration of the banking industry and the failing of American automakers GM and Chrysler, 2008 saw a significant reduction in car leases, a popular alternative to an outright car purchase for 20% of new car seekers. With GM and Chrysler emerging from bankruptcy and the loan market starting to loosen up once again, leases appear to be making a rebound.

Many car buyers who feel leasing is a viable alternative to outright purchase have been waiting in the wings for the financial markets to loosen up loan terms for leasing.

General Motors through GMAC is gearing up for an imminent return to full blown leasing of many of their brands. When GM reinstates a full-blown leasing program, buyers can expect a miniature clunkers invasion into dealerships as people holding out for lease programs to resume flock back into dealership.

When the leasing program launches a few weeks from now, GM will likely offer new lease deals on the following models:

• 2009 models - Cadillac CTS, Chevrolet Malibu, Chevrolet Traverse
• 2010 models - Buick Enclave, Buick LaCrosse, Chevrolet Equinox, GMC Acadia

Although GM has leased through the recent rough times, the company is far off the mark of seeing 15 – 20% of its business come from these contracts. One area where GM fell victim to the competition came in the luxury lease arena. While GM retracted, which hurt its Cadillac business, BMW, Audi and Acura never missed a beat in providing lease funding.