Automakers don't want you to lease a new car anymore.  Once the source of most of the Big Three's profits, leases have become a drag on financial recovery plans for Ford, GM and Chrysler this year.  All three have made plans to get out of the leasing business or scale back their leased offerings. 

The Wall Street Journal, however, reports an upside to the end of leasing.  "The upshot is that loyal lease customers looking to stay in a new car will increasingly have to consider buying, which in many cases will involve a higher monthly payment. But auto makers are looking to make these payments as attractive as possible."  Chrysler, for example, "hopes to make payments on 72-month loans for purchasing a new vehicle the same as those on its previous 36-month leases."  Other automakers "eager to move inventory amid the economic slowdown, are offering enticements to buy -- sweet discounts and good financing deals. On the used-car market, prices are lower than they've been in years, particularly for trucks and SUVs, because of an inventory glut." 

Foreign automakers are setting up incentives to buy instead of lease as well.  Bloomberg reports, "To encourage purchases rather than leases, BMW several weeks ago began offering buyers 0.9 percent loans of as long as five years."  The company is concerned because nearly 60 percent of its U.S. sales come from leases.

Of course, encouraging you to buy a car is half of the equation for automakers.  Discouraging you from leasing is the other half.  Bloomberg notes that BMW "also raised its lease prices an average of 3 percent" while lowering interest on purchase loans.   

The Journal adds, "Ford plans to raise lease prices on trucks and sport-utility vehicles so high that consumers will balk and be forced to consider buying, according to a memo sent to dealers."

Chrysler is taking steps to retain customers at the end of their leases.  Motor Trend reports, "When it comes time for drivers to turn in their leased rides, the company will encourage them to switch to retail, offering incentives such as an extra $750 loyalty bonus to the current deals for new vehicle purchases. In addition, if a customer wants to buy his or her vehicle at the end of the lease for the agreed residual value, Chrysler will also waive the disposition fee that's typically a part of the transaction." 

Why are they so interested in getting you to buy your leased vehicle?  Because it's probably lost a lot of its value, and they don't want to be stuck with it.  In fact, many current vehicles have lost so much of their value that, the WSJ points out, "For those turning in their leased vehicles, looking for that same car on the used market is likely a better option."

Bloomberg notes, "Almost 800,000 of the least fuel-efficient SUVs will be returned by buyers this year on two- or three-year leases. The models will each be worth about $6,100 less than GM, Ford and other automakers initially figured," according to CNW Market Research.  Ford recently posted a $2.1 billion loss on the value of returned SUVs, and some analysts expect GM to announce a similar loss tomorrow. 

That lost value, Motor Trend comments, "seems to point to the advantage of a lease. If your leased Jeep Commander is virtually worthless in three years, as long as the vehicle's in good shape it's not your problem -- just give it back, pay your fees and walk away. However if you owned it you'd need to worry about getting a good trade-in price, and that might not be so easy." 

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