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CU reacts to GMs return to car leasing
NEW YORK (8/3/09)--General Motors (GM) could begin leasing vehicles again this month, according to The Wall Street Journal (July 31). About 3% of credit unions offer auto leasing. These credit unions have about 8.3% of credit union members, according to the Credit Union National Association’s Credit Union Service Profile for December 2008. Lake Michigan CU, Grand Rapids, Mich., did not react strongly to news about GM possibly leasing again. The credit union ended its leasing program last year when GMAC, Ford and other auto giants pulled out of the leasing market, Scott Wiggins, vice president of lending, told News Now. Even if GMAC starts leasing again, the credit union doesn’t anticipate offering auto leases. It’s likely that auto giants like GMAC will have to increase their lease payments and lower residuals to make it work, Wiggins said. Leasing was attractive to members who were interested in owning a certain car for a few years. In the past, leasing payments had cost some members less than auto loan payments. But the gap in savings will likely shrink, so members may reconsider the benefits of leasing a car. “If they can buy a new car for $360 a month in loan payments, rather than lease a car for $340-$345 a month, they may opt to buy and build equity,” Wiggins said. When Lake Michigan CU stopped its leasing program, it did not receive any calls from members asking them to reinstate the program. “Members were unfazed,” Wiggins said. Normally, members had sought leases through dealerships, and came to the credit union if they couldn’t get leases through dealers.
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