One reason luxury car sales have surged in recent years is that leases have become more and more attractive. And one way manufacturers manage to offer low lease payments is by lying to themselves about how much their cars will be worth when the lease is over. After all, when those leases come due some other exec will be responsible (but not accountable).

This can be a problem for manufacturers even when the market is flat. When the market turns downward, as it’s currently doing, resale values drop. This will leave auto companies with huge losses on their leases. One member informed me today that BMW offered him $5,000 off his buyout if he’ll keep the car. But even with such a large discount, he’s not planning to.

Multiply that by hundreds of thousands, and even millions of vehicles, and we’re talking huge losses.

I’d especially hate to be the lessor of hundreds of thousands of large SUVs right now…