GMAC Leasing Rigidity

[Kaiser Souza]

I have 9 payments left on my H3. My wife has a Volvo XC90. She is turning it in and for fun called the leasing bank and asked if they would discount the residual. They said they would take $8700 off the $24k+ price. It's about 33% off. I said hey, maybe I should call GMAC. Guess how much they would deal with me, zippo.

I then called my dealer and he confirmed this. He said I cannot even return the car and make an offer for it the next day . They will trace the ownership and only let me buy it at the preset price, $18500. He did say he would sell me a new one for $10k off list.

So here I am able to get a Volvo loaded for about $3k less.

Anyone wonder if this company is going to go bankrupt?????????

[RubHer Yellow Ducky]

Originally Posted by Kaiser Souza

I have 9 payments left on my H3. My wife has a Volvo XC90. She is turning it in and for fun called the leasing bank and asked if they would discount the residual. They said they would take $8700 off the $24k+ price. It's about 33% off. I said hey, maybe I should call GMAC. Guess how much they would deal with me, zippo.

I then called my dealer and he confirmed this. He said I cannot even return the car and make an offer for it the next day . They will trace the ownership and only let me buy it at the preset price, $18500. He did say he would sell me a new one for $10k off list.

So here I am able to get a Volvo loaded for about $3k less.

Anyone wonder if this company is going to go bankrupt?????????

Do the MATH...

then pretend you own the dealership and have a major stake in GM Stock...

HUMMERS & other Medium to Large SUV's have very little resale value today (compared to original purchase value) and have gone down in worth at a very fast rate where as the Volvo XC90 has not.

Don't know where you are located but here in South Florida there are 10's of thousands of SUV's, Pickup's and the like just sitting on the dealers lot not moving. Many dealers won't even take them in trade at any price...

We feel your pain...

[Kaiser Souza]

Guess I am missing your logic here. I am in LA.

If I own GM stock, I would have sold or hedged it long ago. If I am a dealer or lender I would roll out the red carpet and take any offer that is reasonable at this time to clear inventory. I would knock off $3k to move the beast.

Explain the logic of holding the price at what you thought it was worth 39 mos ago if no one wants to buy except some enthusiasts like us. Seem like you would be burning interest in the lot and adding to the pain. Remember you only have 2-3 months cash on hand to carry the entire company.

[Big Dad]

There were 6 H3's, 1 H2, and about 40 Cadillac's on the lot at our Hummer dealer.

[RubHer Yellow Ducky]

Its not a point of holding an old price but how much can you sell below cost before you make a profit...LOL

Among all the things I have done I worked in the wholesale and retail photo industry for a long time ... New York Mail Order which sold a chit lot of photo goods use to offer some UNBELEIVEABLE DEALS that people tried to buy...It seemed like a lot of times the sale (below real cost) somehow got lost/backordered when it was a camera or lens only, at some crazy price but when you ordered the SUPER DUPER 10 Piece Kit with all the hidden no brand name accessories they could ship...

Well the same thing is happening here but at a higher dollar point...they can only lose so much money per sale (for whatever the reason) on discounted returned leases, trades, sales of new HUMMERS...They are caught between a rock and a hard place with sales falling off 40% and more, the cost of money, floor planning cost, interest, employee costs, mortgages etc etc etc etc...They are looking at a future which may not be there...

[nychot]

we have a 27-month lease with gmac expiring in early march on a 2007 h3 lux. either i return it, or ask for a HUGE discount on the residual and buy it. dont have the lease in front of me at the moment so dont recall the residual but its probably in the mid 20k range. it seems to me that GMAC in the trouble its in would rather have me keep the gas guzzler at a huge discount then take the dinosaur back and try to wholesale it. any thoughts? i think its a great vehicle and would buy at a fire sale price, but not what the market was when i leased in december 2006. it'll be interesting to see what happens, especialy since they are knocking thousands off of new ones right now..

Originally Posted by RubHer Yellow Ducky

Its not a point of holding an old price but how much can you sell below cost before you make a profit...LOL

Among all the things I have done I worked in the wholesale and retail photo industry for a long time ... New York Mail Order which sold a chit lot of photo goods use to offer some UNBELEIVEABLE DEALS that people tried to buy...It seemed like a lot of times the sale (below real cost) somehow got lost/backordered when it was a camera or lens only, at some crazy price but when you ordered the SUPER DUPER 10 Piece Kit with all the hidden no brand name accessories they could ship...

Well the same thing is happening here but at a higher dollar point...they can only lose so much money per sale (for whatever the reason) on discounted returned leases, trades, sales of new HUMMERS...They are caught between a rock and a hard place with sales falling off 40% and more, the cost of money, floor planning cost, interest, employee costs, mortgages etc etc etc etc...They are looking at a future which may not be there...

[Ken06H3]

Doesn't GMAC (as well as other companies doing this type of business) have an insurance policy that covers their loss? If so, they are gonna get the amount determined in the contract.

I have a Smartbuy on my H3 and have thought about changing, but looking at the prices H3 are bringing now planning to just return it.

[Hummer Guy]

Originally Posted by Ken06H3

Doesn't GMAC (as well as other companies doing this type of business) have an insurance policy that covers their loss? If so, they are gonna get the amount determined in the contract.

I have a Smartbuy on my H3 and have thought about changing, but looking at the prices H3 are bringing now planning to just return it.

They ARE the 'insurance' in that the gamble is on them, instead of you, the consumer. This is the reason they posted a $2.5 Billion loss last quarter -- which can partly be attributed to lease/smart-buy returns that the residual value was miscalculated.

This is why you're seeing folks like Chrysler completely eliminate leasing, and GMAC greatly reducing lease programs.

[wannabeH3]

i wonder what i should do. i bought it and owe 25k on it still :P its worth like 20... for trade in. should i trade in now or just keep it