Auto leasing picking up speed, according to Consumer Affairs.
When financing a new car, consumers have the option of a purchase or a lease. In the past a lease was usually reserved for very expensive cars or those used in businesses, where the payments could be a tax write-off.
But increasingly, new car shoppers are choosing a lease over a purchase, no doubt in large part to some attractive lease terms being offered on all types of vehicles. As a car dealer finance manager told me when I recently leased a vehicle, “manufacturers have figured out leases are great for business. In three years you’ll be back for another vehicle.”
Perhaps, although I do have the option of purchasing my leased vehicle if I want. But he’s right about the attractiveness to carmakers. Market data shows that people who purchase a car drive it an average of six years.
Having a low monthly lease payment and being able to trade-in for a new car in three years without much adjustment to the payment is attractive. And it turns out I’m not the only one thinking that way.