North of the border, leasing has plunged to 7% of the finance market, from 45% in 2005. Now bankers — and some automakers — are banding together to try to change that.
For years, leasing was a captive-only offering. Banks were prohibited from granting leases as mandated by the federal Bank Act. But in advance of the 2011 review of the legislation, several Canadian OEMs — GM, Mazda, Mitsubishi, and Nissan — have come out publicly in favor of modifying the law to include banks. Their premise: Tougher competition would improve pricing for consumers.
“Our consumers in Canada have less financial options because of the Bank Act, and because they have less options, we are less competitive,” said Don Romano, president of Mazda Canada, in an article in The Globe and Mail. “This is one of those areas where competition is good. It’s going to help the consumer.”
Still, Ford Motor Co. of Canada, Honda Canada, Toyota Canada, and luxury brands BMW Canada and Mercedes-Benz Canada are opposed to letting banks join the leasing fray.
