GM soon put an end to the vehicle rental long term
General Motors of Canada (GM) of 1 August cease offering rental discounts to new vehicles in Canada to capitalize on the sale to keep in mind the industry. The automaker announced the decision on Monday, has its Canadian dealers. The spokesman for GMAC, Gina Proia, the provider of automotive financing to GM Canada, evokes the current market conditions and the reduction of the residual value of the vehicle at the end of the lease.
Thus, it will not be possible to lease a new vehicle has preferential rates as low as 0.5 percent, incentive measures used lately to attract consumers. Ms. Proia, it will always be possible to rent a vehicle has standard rates, which are significantly more students. The model is based on that of Chrysler Financial, which continues to finance lease in Canada, but higher rates. In addition, GMAC spokeswoman stressed that no announcement has been made in this direction for leases in the United States.
GMAC, a subsidiary of GM, and Chrysler Financial are both held by the firm Cerberus Capital, New York, which incidentally also redeemed 80 percent of Chrysler. Thus, the American credit crisis would add to the financial pressures.
The output of the rent is provoked by falling Residual values, crashing in the case of big gas guzzlers, explained Christian Navarre, specialist automotive industry at the University of Ottawa. To attract customers, manufacturers subsidizes Residual values, but the three major North American manufacturers accuse considerable losses.
Mr. Navarre, manufacturers like Toyota will benefit from decisions of GM and Chrysler. For the president of the Association for Automobile Protection (APA), George Iny, the decision of GM is mixed for consumers. According to him, the option will encourage those who wish to keep their vehicles longer, due to reductions in prices recently proposed purchase by GM. However, to reduce the monthly installments for purchase, Mr. Iny is worried about the possibility that GM offers contracts that may extend over a period of up to seven years. Dennis DesRosiers, of DesRosiers Automotive Consultants, recalled that if the lease is limited to 18 percent of the market in the United States, she has climbed 45 percent in Canada.
