General Motors is offering month-to-month lease extensions during the coronavirus pandemic.
With many states having forced automotive dealerships to close down, GM customers who are coming up on the end of their vehicle lease periods could be left without a car, truck or SUV during the pandemic. In response, GM will allow lessees to extend their contract period on a month-by-month basis, allowing them to keep their vehicles without having to venture out of their homes and break the CDC’s social distancing guidelines.
On its website, GM Financial says it will automatically process a one-month extension for current lessees. If the company does not hear from the customer within 10 days from when the lease is up, they will automatically extend the lease for one month. If more time is needed after that, the company says it will work with the customer on a solution that meets their needs. They will still have to make their regular monthly payment on their usual scheduled date during this time, however, and the previously agreed upon mileage limit will stand during the extension period.
While this move is in good faith, it’s also important for business. Industry experts at J.D. Power told Automotive News that retaining lease customers will be important for both automakers and dealers alike as the pandemic continues to hammer the industry in the coming months.
GM’s sales were down 7 percent to 618,335 units in Q1 and analysts are predicting more struggles for the industry in Q2. Last month, automotive industry analysts at Morgan Stanley predicted the pandemic could result in a 9 percent dip in U.S. auto sales for the year. Desrosiers Automotive Consultants, a Toronto-based consulting firm, is predicting Canadian auto sales to fall by as much as 25 to 30 percent in 2020.
GM is not alone in offering lease extensions during the pandemic. Ford and Nissan are also allowing lessees to extend their contract periods month to month. A Ford spokesperson told AN that it has already been offering lease extensions “by the thousands.”
Customers who are unable to extend their lease period on their vehicles are still able to return the vehicles. One dealer operator told AN that their customers were coming and dropping the lease vehicles off in the service drive so they do not have to interact with any dealer personnel.
While many states have ordered the closure of auto dealers’ showrooms, many are still able to operate service centers to perform necessary maintenance or repairs on customer vehicles. Essential workers such as doctors, nurses, police and others still need to get to and from work and could be left stranded if they experience an issue with their vehicle and have nowhere to get it repaired.
Customers who may need a lease extension through GM Financial can learn more about the program at this link.