Leasing as a whole took a dive in Canada for a few years following 2008, but the plunge only significantly affected the captive finance arms of U.S. brands, experts say.
Chrysler and General Motors essentially pulled out of leasing, taking captives’ overall auto finance share from 82 per cent in 2008 to 45 per cent in 2012, according to J.D. Power.
Ford does not publish its loan-versus-lease penetration, but it also “rebalanced marketing support to favour retail sales to a greater degree,” while still making both loans and leases available throughout the financial crisis, said Paul Monjanel, president of Ford Credit Canada.
“Leasing is a key product so together we make sure that we use it in a way that is sustainable over cycles,” he said. “Our present lease mix is consistent with that of the industry at around 25 per cent of Ford sales.”
Other captives, such as Toyota and Honda’s finance arms, were less affected.
“Looking back over that last 10 years we have evolved, but we haven’t had significant differences like competitors [have],” said Darren Cooper, president of Toyota Credit Canada. Toyota’s Canadian captive’s lease penetration has been above 50 per cent for a long time, he said.
Leasing brought Toyota’s customers back to the dealership more quickly and increased dealerships’ inventory of late-model used vehicles.
In 2008, Toyota Credit Canada even took on a relationship with another automaker. It began working with Subaru to support both its loans and leases, Cooper said. Toyota has acquired a minority equity stake in Subaru, beginning in 2005 when it bought shares from GM.
Domestic captives’ leasing levels, on the other hand, completely diminished in some cases. For example, GM abandoned the lease market, entirely.