I was recently on CNN and asked if a driver would have any leverage to renegotiate a car lease with GMAC Financial Services now that General Motors is going through bankruptcy. The short answer is probably not. Here’s why:
First, the only drivers getting any deals out of GM’s bankruptcy are those in the market for new cars. There’s really no incentive for the automaker or GMAC to offer discounts to folks who already own or lease their vehicles.
This doesn’t mean a driver can’t refinance an auto lease. You could try to do so with another lender. In fact, this used to be a pretty common transaction a couple of years ago.
But here’s the rub: a number of players have exited the used auto lease business over the past year so deals are more difficult to come by, says Tarry Shabesta, president and CEO of Automobile Consumer Services, a company that owns LeaseTrader.com. And in this particular case, Shabesta believes a GM driver would have an even tougher time saving money on a new lease. That’s because the leasee likely got a deal when he first financed the car through a subsidized lease. And since no new lease would include any financial incentives from the automaker, the driver would most likely end up paying more each month.
So what should this driver do? His best bet is to stick with his existing lease and keep on making those monthly payments. If he really needs to unload the car — perhaps he lost his job and can’t afford the payments anymore — he could consider listing his vehicle with a website like Swapalease.com or LeaseTrader.com, which will help him find someone else to take over his lease.
Would you lease a car in today’s auto environment? Please share your opinions with me.
Keys image by bohman, CC 2.0.
