Chase Auto Finance, the No. 3 U.S. auto lender, has slashed its leasing business.
On Sept. 1, Chase stopped writing new leases on all but Subaru and Saturn vehicles. The lender has contracts to provide financial services to those brands. Next month, Chase will launch a similar relationship with Mazda.
In the first half of 2008, Chase Auto Finance had nearly 5.2 percent of the overall U.S. auto lending market, trailing only Toyota Financial Services and GMAC Financial Services, according to Experian AutoCount. Chase had 1.8 percent of the leasing market, Experian estimated.
Chase spokesman Mary Kay Bean said the bank is "focusing on the profitable segments of the business. ... We decided to limit our lease and balloon financing offers to our manufacturing partners to keep our lease portfolio small."
Chase stopped writing leases on Chrysler LLC vehicles in August, shortly after Chrysler Financial abandoned U.S. leasing.
Other large auto lenders also have cut back on leasing. At the end of July, Wells Fargo Auto Finance stopped writing leases. This summer, GMAC and Ford Motor Credit Co. reduced their leasing business, especially to customers with poor credit.
In the first half of 2008, one of every five new vehicles sold at retail in the United States was leased, up from one in seven in 2003, according to J.D. Power and Associates.
But high gasoline prices have caused values of large trucks to depreciate sharply. The lease business deteriorated as lenders lost money on used vehicles coming off lease.