In another sign that the auto industry is pulling away from lease deals, General Motors Corp. is cutting back incentives on new GMC, Buick and Pontiac vehicles.
Dealers learned Monday that the only lease deal they'll have to offer for those brands through GM's partially owned financial arm GMAC will be on the Pontiac G6, said Russ Shelton, owner of Shelton Pontiac Buick GMC in Rochester Hills.
The narrowed leasing incentives start Wednesday. It is unclear what kind of leasing deals GM will support for other brands, including Chevrolet, Saturn and Hummer.
GM spokesman John McDonald said he couldn't comment on specific deals.
GM expects to announce today details of its plan to offer its employee discount to all customers.
"Leases, for a long time, have been supported at below-market rates. We're not able to financially support leases at below-market rates when the residuals have eroded as much as they have," McDonald said.
Toward the end of July, rival automakers began changing their leasing strategies 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 understands why automakers are shying away from leasing.
"The cost of leasing has just become prohibitive," he said.
Still, Shelton said he is trying to reach out to other financial institutions to give his customers the option to lease.
"People have gotten used to it," Shelton said.
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