GM Financial will boost leasing

Dealerships should expect more retail lease offers from GM Financial, after the company said its third-quarter lease penetration was "below what we consider optimal levels."

CEO Dan Berce said last week GM Financial is working with General Motors to come up with "more attractive lease offerings to generate sustainably higher lease volumes."

For the third quarter, GM Financial originated $188.7 million worth of leases for GM, compared with none a year ago. Third-quarter leases were up 9.2 percent from $172.8 million in the second quarter.

However, the vast majority of those leases were in Canada. In the third quarter, only about $32 million worth was in the United States, according to Caitlin DeYoung, GM Financial vice president of investor relations.

GM also uses Ally Financial and U.S. Bank as lease sources. Overall, GM isn't that far below its target for lease penetration, said Jim Cain, a GM spokesman. Through October this year, he said, GM's lease penetration was 13.6 percent vs. a target of about 15 percent.

The industry average for lease penetration through October was about 20 percent, Cain said. GM's lease target is lower than industry average in part because it sells a high mix of light trucks, and those tend to be leased less often, he said.

DeYoung said GM Financial wouldn't disclose a specific leasing target going forward. "We would like to see higher volumes so that we can build scale in our lease portfolio over time," she said.

Previously GM said it bought GM Financial, formerly AmeriCredit Corp., primarily to offer leases and subprime loans.

However, GM also is adding capabilities to make GM Financial a full-service captive finance company. That plan includes prime-risk and near-prime loans; commercial lending for dealers, including floorplan and capital improvement loans; plus F&I products such as extended-service contracts.

Berce said GM Financial plans to launch commercial lending for dealers in April 2012.