Car Dealer Lawyer

A guy who worked for me used to say, “Never argue with a fool or a General unless you are a bigger fool or a bigger General.”  (I don’t think he was implying that I was a “General.”)  I use the same approach when I hear people condemn leasing as a bad deal for the consumer in all cases.  Usually they hold their belief as almost a religion, so I just don’t argue with them.

But the current situation with Chrysler Credit, Ford Motor Credit Co., and GMAC illustrates that leasing is often not a bad deal at all.  Ford took a $2.1 billion dollar charge to account for over-residualized lease vehicles.  GMAC took at $716 million charge.  What people forget is that customers were on the other sides of these transactions.  Those billions of dollars are losses that lease customers do not have to take.  At the end of their leases, they can stroll into a dealership, drop off their leased vehicle, and not worry at all about the fact that their vehicle’s value has dropped like a rock.  But what about the people who “bought” their SUV’s or pickups?  Collectively, they have lost billions.  The shift in gas prices has caused a massive loss in the value of most Americans’ vehicles.  

So the next time that you hear someone telling you that they would never lease a car, ask them why they haven’t traded that Hummer.