Ford's choice to simply revalue the residuals in its leases effectively takes it out of the market as well, with the price rising enough to make buying a preferable alternative.
In addition to remaining in the lease business, GM will also continue to offer cash incentives, competitive interest rates and a variety of lease terms for 'most' 2008 and 2009 models, reports The Detroit News.
Original: Following on news that Chrysler's financial arm will terminate its lease underwriting on August 1, GMAC has today revealed they will do essentially the same, but for the Canadian market only.
Cerberus Capital Management, the same company that owns Chrysler, owns 51% of GMAC, while General Motors owns the remainder.
The news of the cessation of subsidized leasing in Canada brings worries over the state of the company's financial situation.
A spokesperson said the company is facing "funding challenges", reports Autmotive News. GMAC's involvement in real estate has subjected it to the vagaries of the sub-prime mortgage crunch as well as the weak car market.
Whether this is an isolated event or a precursor to an announcement covering leasing throughout North America, including the U.S., is unknown, though as a cost-cutting measure, including the U.S. in the plan would be much more effective. In fact, in the U.S. GMAC is considering ending subsidized leases on GM cars and trucks, a step similar to the pullback the finance company has announced for Canada.