LexFather

According to a report by the Wall Street Journal, FoMoCo will increase lease prices on trucks and SUVs as the resale value of the segment diminish and as Ford’s finance arm reports ‘extreme losses’ on those vehicles. The report said the FoMoCo will price pickups and SUVs high-enough so that consumers aren’t interested in leasing the vehicles at all.

A memo sent to Ford dealers read: “Due to extreme losses Ford Credit is taking on off-lease vehicles, it will be necessary for Ford Motor Credit Company to adjust residuals mid-quarter on the following vehicle line,” the newspaper reported.


The changes will take effect August 1st and will affect the new 2009 Ford F-150, Ford Explorer and Sport Trac SUVs.

Chrysler announced last week that starting August 1st, it will exit the leasing business altogether.

mmarshall

The way I understand the leasing buisness, though, this only affects vehicles specifically leased through Ford Credit. Many dealerships are financed by local banks........and that may or may affect Ford vehicles that are not covered by Ford Credit. If local banks, who often finance local dealerships, agree to keep on leasing (a big question mark, of course ?), then it may not matter what Ford itself does.

xioix

Wow, I wonder if more automakers will start to steer away from leases

B Dot

I know they are losing money leasing those things out, I work at a Ford dealer and they are selling brand new F-150 for atleast 6 grand under msrp. A salesman told me basically they are giving them away lol. If they are losing that much money brand new when someone leases one and turns back in a year or two the value of the truck wont be that much.

bitkahuna

iTrader: (20)

Still won't matter because most factory lease rates are better than the banks already and banks, already bleeding tons of red ink from housing aren't likely to be very interested in aggressive car/truck lease rates.

<VENOM>

Back in early 06 when I almost got myself an 06 Lariat F150 the finance deals where way better then the lease deals, several dealers I visited immediately offered me finance options not even asking me if I wanted to lease, what was funny was of all the dealers I went to could not even get these truck off the lots and then gas, regular 87 was at a high of 2.50-2.70 but the Lincoln dealer that was next door in the same building was offering Mark LT lease deals at 329 for 3 years, zero down if it was not for the high mileage commute I would have leased the Lincoln, odd how Ford has dropped the Mark LT for 09, nothing more then a chrome clad top of the line F150

It's also interesting to know that Ford/Lincoln/Mercury dealers are disappearing

98GS430

Most leases are incentivised by the factory finance arms, IE Ford Motor Credit. You cant blame them for killing the leasing business, because they are loosing millions on lease turn in vehicles because the value of those cars is dramatically less then their initial residual values.