GM Canada gone from leasing business

[jamz]

Filed under: Car Buying, GM, Earnings/Financials, Canada
Following the lead set by Chrysler Financial in the United States, GM Canada has announced that it will no longer offer leases through its GMAC Financial arm. While Chrysler LLC has not officially cut out lease deals in Canada, dealers up north report that the rates being offered to them are far too high to be feasible. GMAC spokeswoman Gina Proia told Bloomberg, "There's just a lack of funding in that country for lease assets." Both Chrysler LLC and GMAC are owned in part by Cerberus Capital Management LP.

This leasing downturn is expected to hit hard in Canada, where leases make up a larger percentage of new car sales than in the States. To counter the issue, long-term financing deals with zero-percent interest are being established both by the automakers and by certain third-party lending institutions in an effort to continue offering the low payment solutions that the buying public has grown accustomed to. Thanks for the tip, Lance!

[Sources: Report on Business, Bloomberg]
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