While the Big Three automakers have scaled back or put the kibosh entirely on vehicle leasing, that doesn't mean the financing arrangement has disappeared.
In fact, Jim Gettel, owner of Honda, Acura, Kia, Hyundai and Nissan dealerships in Bradenton and Sarasota, says leasing still makes sense for him because his vehicles typically retain their post-lease period or residual value.
"Many of the imports, including Toyota, Honda and Nissan, decided to stay the course with leasing," Gettel said. "Residual values have remained high on those import vehicles. We're very fortunate we have brands that historically have had great resale value and still do."
Analysts say that may give foreign automakers an edge in sales to U.S. consumers because leasing vehicles is often less expensive than purchasing them.
Chrysler stopped offering leases this summer. General Motors stopped leasing in Canada last month, and Ford increased its lease payments on trucks and SUVs.
The reason: Large trucks and SUVs have seen their residual value plummet because of the soaring cost of gas and people's growing reluctance to drive them.
That means the dealer winds up eating the difference once the lessee turns in the car.
"The gas crunch of course took the SUVs and trucks and turned their value well below what was expected after three years," Gettel said. "A typical lease is three or four years. When you're losing $4,000 or $5,000 on every vehicle that comes back, that caused all this uncertainty and all this loss."
Consumers choose to lease for various reasons. Typically, lease payments have been lower than financing payments, helping consumers stay within a budget. Some simply like driving a new car every three or four years. Still others opt for a lease in order to drive fancier cars than they could otherwise afford.
A decrease in residual value accounts for some dealerships raising lease payments on certain vehicles, meaning the option is less economical in some cases.
Automotive Web site Edmunds.com offers a loan-versus-lease calculator that helps consumers decide if a lease is right for them.
Rick Karras, general manager and co-owner of Alex Karras Lincoln-Mercury, said he's still doing a brisk leasing business, despite recent turmoil in the industry.
"We're probably leasing 35 percent to 40 percent of the vehicles that leave here new," Karras said. "It probably would affect the Ford stores more than it would us because we sell mainly vehicles. I know a lot of the manufacturers really took a hit on the big SUVs and trucks. There was a point where they were dropping $500 a week in value."
Karras said he is often able to offer consumers lower payments on vehicles that are leased rather than purchased.
Consumers can save an average of $50 to $60 a month on a three-year lease of an entry-level car, he said.
"If you take a typical first-time buyer that's getting into a vehicle, their payment on a lease is going to be less than if they buy," Karras said. "As long as you have good residuals and lease rates, it's a definite win for a consumer." Vehicle leasing remains viable option for consumers, despite some dealers discontinuing the practice
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