Ford and GM are joining Chrysler in moving away from auto leasing, the Wall Street Journal reports, signalling the end of an era in which leases allowed many Americans to drive more expensive cars than they could afford to buy. The move is prompted by falling prices for used SUVs and trucks, which has led to steep losses for the automakers when they resell the vehicles at the end of the lease period.
Ford told dealers yesterday it would drop leasing of SUVs and trucks; GM said it was dropping subsidized leases in Canada, and is expected to make a similar move in the US this week, the Journal reports. Chrysler announced a retreat from leasing last week. For the Big Three, abandoning leases could cost them customers who may turn instead to foreign automakers that aren’t suffering from a plunge in resale value of their vehicles.