Automakers Take Advantage of Industry Climate

Wahington DC May 19, 2005; AIADA reported that as rising interest rates make 0 percent deals and car financing costlier again, car makers are working overtime to push their leasing numbers back up. This year marks the first time in at least four years that car makers spent more money on leasing incentives in the first quarter than on traditional financing deals, according to CNW Marketing Research Inc.,” reports the Wall Street Journal. Among manufacturers placing more focus on offering lease deals are GM, Ford, DaimlerChrysler, Toyota and BMW. “Ford Motor Co. says that at its Ford Division, about 12 percent of customers currently lease vehicles, higher than its 10 percent rate a year ago. BMW AG also reports a strong increase in lease rates in the U.S. in the past couple of months. "Leasing is making a comeback with our customers," says Kerry Rivera of Toyota. “Toyota is offering lease specials on many more vehicles than as recently as last fall. The company is now offering national leasing specials on 10 different vehicles (including the popular Sequoia, RAV4 and Matrix) up from just three last summer and fall.” More from the Journal: “According to Edmunds.com, manufacturers’ average subsidy on leases was $4,343 for 2005 models in April, up from $3,300 for 2004 models last April. During the same time period, manufacturers’ average subsidy on cash incentives and financing deals both fell.”