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Throughout The Car Industry

More People Leasing Cars Now Than Ever

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On: Mon, Jul 15, 2013 at 9:09AM | By: Elizabeth Puckett

More People Leasing Cars Now Than Ever

Leasing a car used to be a trend reserved for luxury car drivers, but leasing of many different models and classes of vehicles has hit record levels over the last few months. Easier credit qualifications and attractive deals have more people looking to lease their next vehicle.

When you lease a car, you’re basically renting it for an extended period of time. Lease periods usually last two, three or four years, and when the lease is up, you simply return the vehicle to the dealer.

There are many advantages in leasing a vehicle instead of buying, for both the drivers and the dealers. For drivers, a lease is typically easier to qualify for and the monthly payments are less than on an auto loan. Drivers also don’t have to worry about long-term ownership or selling the vehicle when they want to trade up. Dealers are able to make a lot of money from leased vehicles since they can be re-leased multiple times.

There are, of course, plenty of drawbacks to leasing. If you lease and never buy, you’ll always have a car payment and you’ll never have the advantage of owning a car. Many dealers offer the option of buying the vehicle at the end of the lease, but that’s rarely ever a money-saving deal as they don’t offer to let you buy the vehicle at its current depreciated value—the sell price is the same as it was when you began the lease agreement.

The average lease payment is around $360 a month with the average auto loan monthly payment around $430. There are, of course, far cheaper cars to lease—such as the Honda Civic which leases for $169 a month with zero down. These advertised prices don’t include tax and can skyrocket for people with bad credit.

Topping the list of most frequently leased vehicles in the United States are no longer BMW and Jaguar class vehicles, but are cars like the Honda Civic, the Toyota Camry, the Honda Accord, and the Hyundai Sonata. That’s right, people are leasing economy cars and more practical vehicles as opposed to luxury and executive vehicles.

Over the past few months, the number of auto leases has jumped to a new record of 25.6% of new vehicle sales. Nine years ago, the percentage of leased vehicles in new car sales was only about 16%.

If leasing makes sense for you, now is a great time to jump on some of the deals on leased vehicles.


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