General Motors' consumer finance arm began offering incentives on leases of new GM cars and trucks Monday, hoping to spark business in the first week of the 1989 model year and to cut inventory of its '88 models.
General Motors Acceptance Corp. said the incentives will offer customers in the growing lease market reductions in monthly payments and the worth of a car or truck at the end of the lease period.
The finance divisions of Ford Motor and Chrysler already offer similar lease programs, spokesmen said Monday.
Hillary Spittel, a spokeswoman for GMAC, said she could not provide any range of savings on monthly payments or specific examples of the incentives because of variations in lease contracts.
Most popular GM nameplates are part of the promotion, including the Chevrolet Corsica and Beretta, the Pontiac Grand Am, three Oldsmobile Cutlass models and two GMC truck lines. The offer runs through year-end.
GM has 500,000 vehicle leases outstanding, but a breakdown of how many of those leases are individual consumers was unavailable, GMAC spokesman John Andrews said.
"What we've done is a corporatewide program," Andrews said. "Leasing programs have been done by each of the (six GM) divisions. Under our old programs, the purchase price was determined at the end of lease and was the fair market value of the car."
Knowing the post-lease or residual value of the car at the beginning of the lease period is an advantage to the leaseholder in considering whether to buy out the lease at its end, Andrews said.
GM dealers will benefit from national promotion of the Smartlease program, which began during Sunday night's telecast of the Summer Olympics, he said.
Jeffrey Foltz, an analyst with the WEFA Group in Bala-Cynwyd, Pa., said he wasn't sure why GM would want to fix the residual price, but he said consumers should expect a conservative value to be placed on the leased autos.
Andrews said books similar to those used for determining values of used cars would be used in figuring the residual value of leased vehicles.
Ford Motor Credit Co. began a similar leasing program about five years ago, spokeswoman Joy Wolfe said.