Breaking ranks with the other main car groups, the US firm will cut back...
General Motors Corp. is cutting back on auto leasing, breaking ranks with rival automakers in an effort to lift profit and improve the resale value of vehicles when contracts end.
Leases made up just 8 percent of the largest automaker's retail sales last month, down from a high of 19 percent in July 1999. The shift occurred in part because the company offered $2,002 or no-interest loans to people who bought cars and trucks.
Leasing, once a favored tool to entice consumers into more- expensive vehicles with low monthly payments, has lost some appeal for automakers as a glut of used cars lowers resale prices. Leasing a 2002 midsized car may cost General Motors about $2,250 more than Honda Motor Co. because the Japanese brand holds its value better, a Delaware dealer said.
``Leasing is very expensive, and as leasing exploded in the last few years, we all found out how expensive that is,'' said Paul Ballew, General Motors' market analysis director. General Motors plans to keep leases below 20 percent of sales, he said.