General Motors Corp. said it is cutting back lease incentives on new GMC, Buick and Pontiac vehicles, according to the Detroit Free Press. The move is seen as another sign that the auto industry is pulling away from lease deals.
The narrowed leasing incentives started Aug. 20.
Russ Shelton, owner of Shelton Pontiac Buick GMC in Rochester Hills, said dealers learned on Aug. 18 that the only lease deal they will have to offer for those three brands through GM's partially owned financial arm GMAC will be on the Pontiac G6. It is not known what kind of leasing deals GM will support for other brands, including Chevrolet, Saturn and Hummer.
GM spokesman John McDonald said leases have been supported at below-market rates for some time now. He said GM was not able to financially support leases at below-market rates when the residuals have eroded as much as they have.
Other automakers began changing their leasing strategies this year as they reported large quarterly losses related to old leases. Chrysler decided to get out of leasing altogether; others raised lease rates and curtailed leasing of certain models.
Leasing is still available for other vehicles, but without incentives that have drawn consumers to dealerships.
Shelton said he is trying to reach out to other financial institutions to give his customers the option to lease.
GM expects to announce today details of its plan to offer its employee discount to all customers, according to the Detroit Free Press.