johnnymk
07-01-2008, 04:02 AM
http://www.autoweek.com/apps/pbcs.dll/article?AID=/20080616/FREE/274191619/1530/FREE
If you thought $4 per gallon was a hit to the wallet, wait until hundreds of thousands of off-lease sport/utility vehicles are returned to dealerships. That's when the whammy of inflated residual values of off-lease sport/utes will hammer the market.
According to Oregon-based CNW Research, with some 800,000 truck-based sport/utility vehicles coming off lease this year, residual values projected three and four years ago will be missed by as much as $6,000 per unit.
Whom will this hurt? Those who lend the money--banks, credit unions, car companies' captive finance arms and others who write leases--will face a tab of nearly $5 billion just in 2008. That number rises to $5.24 billion in '09 and $4.74 billion at the end of the decade.
The only slight potential benefit to consumers is that they can buy their leased vehicles for bargain prices; experts predict that only 20 percent will do so.
You don't need a research firm to tell you that sport/ute residuals have plummeted. Go to Kelly Blue Book and see what a two-year-old V8-powered Chevrolet Suburban or Toyota Land Cruiser will run you.
A 2008 Suburban 2500 with a 6.0-liter V8, four-wheel drive, automatic transmission and leather sells new for $43,235; a two-year-old model with 24,000 miles in excellent condition can be yours for less than $20,000.
A new-generation 2008 Toyota Land Cruiser with a 5.7-liter V8 that gets 13 mpg city and 18 mpg highway runs for $64,785; a two-year-old model similarly equipped goes for between $34,120 and $35,975, depending on its condition.
If you thought $4 per gallon was a hit to the wallet, wait until hundreds of thousands of off-lease sport/utility vehicles are returned to dealerships. That's when the whammy of inflated residual values of off-lease sport/utes will hammer the market.
According to Oregon-based CNW Research, with some 800,000 truck-based sport/utility vehicles coming off lease this year, residual values projected three and four years ago will be missed by as much as $6,000 per unit.
Whom will this hurt? Those who lend the money--banks, credit unions, car companies' captive finance arms and others who write leases--will face a tab of nearly $5 billion just in 2008. That number rises to $5.24 billion in '09 and $4.74 billion at the end of the decade.
The only slight potential benefit to consumers is that they can buy their leased vehicles for bargain prices; experts predict that only 20 percent will do so.
You don't need a research firm to tell you that sport/ute residuals have plummeted. Go to Kelly Blue Book and see what a two-year-old V8-powered Chevrolet Suburban or Toyota Land Cruiser will run you.
A 2008 Suburban 2500 with a 6.0-liter V8, four-wheel drive, automatic transmission and leather sells new for $43,235; a two-year-old model with 24,000 miles in excellent condition can be yours for less than $20,000.
A new-generation 2008 Toyota Land Cruiser with a 5.7-liter V8 that gets 13 mpg city and 18 mpg highway runs for $64,785; a two-year-old model similarly equipped goes for between $34,120 and $35,975, depending on its condition.