Car Leasing Industry Is Hurting

Interesting | August 17th, 2008 by 5

If you have been following our blog lately, you are already familiar with the latest news from the auto industry and especially BMW’s strategy for …

If you have been following our blog lately, you are already familiar with the latest news from the auto industry and especially BMW’s strategy for the future. In a recent development, BMW is looking to move away from their car leasing business and focus more on the financing programs through increased incentives.

Chrysler is another major car manufacturer that imposes new restrictions on their leasing program, a decision that draw some criticism. These latest decisions will affect directly the buyers that are more interested in leasing their cars rather than financing and the leasing process might become a little more complicated since third-party leasing companies will have to work out deal together with the customer and the dealership selling the car.

On top of the increased difficulties in the leasing process, I am also expecting a mark up on  the lease rates. Fewer players in the game, more opportunities for revenue.

On the bright side, there will be new companies that will step in and replace the traditional banks that used to back up the leasing programs and the consumers will have more choices on choosing the leasing company.

One of those companies is LeaseCompare.com, a respected businesses in the car leasing market, which through their website, offers lease comparisons rates, purchasing and leasing advice. Tarry Shebesta, the President of LeaseCompare.com, was featured in an CNBC newscast just a few weeks ago and he had an interesting point of view.

Here is the link to the CNBC interview

Staying on the same subject, other businesses will benefit from the changes in the leasing industry. LeaseTrader.com is a website where people can get out of a lease or actually taking over another one. By an increase in the new car leases payments, we expect the amount of transactions to go up on LeaseTrader, with more and more people looking at the posibility of taking over a one or two year lease, rather than starting a new one with the car manufacturer.

And here is an interview with Sergio Stiberman, featured on CNBC as well.

[youtube]http://www.youtube.com/watch?v=PRY54go7XC8[/youtube]

How will this new changes work out? We don’t know exactly yet, but the automotive industry is going through some major changes and adjustments that will impact the way we think of car leasing or purchasing.

BMWBLOG

NEWSLETTER