Vehicle leasing regains popularity as a sign of recovering economy

Article by Christian A., on April 7, 2011

Vehicle leasing is gaining back its popularity – another sign that the economy is improving and that the auto industry is on its way to recovery. During the recession, this financing option dried up as credit became limited.

Consumers who like leasing will be pleased with this development since this option may offer more affordable monthly payments plus a new car every two years. What attracts automakers and dealers to leasing is its capacity to boost sales and the fact that customer visits to showrooms will be more frequent.

John Sternal, vice president of Leasetrader.com, an online lease tracking firm, said that vehicle leasing has “stormed back” and that there are now advertising lease deals being advertised with monthly payments that are under $199.

Sternal said that this wouldn’t have been possible 14-16 months ago. This trend is a reflection of improving economic conditions, as credit markets loosen up and banks are less strict about lending and they tend to offer low interest rates.

In addition, used car values are strong and this makes lenders more confident about a good return during resale. In order to attract customers, automakers are offering low monthly payments, and some even include cash back and require no downpayment upon signing.

As a result, customers are rushing to dealer showrooms to lease cars and trucks. However, analysts warn automakers about a leasing risk.

They say that since leased cars are resold every few years, resale values may be hurt when the market is filled with used cars as a result of numerous deals running simultaneously. For the month of March, leases made up 21% of new car sales. In February, leasing stood for around one-quarter of all car and truck sales. This is the highest monthly lease rate recorded since November 2005.

Topics: sales

If you liked the article, share on:

Comments

Recommended

The primary suggestion of a 4x4 ute from French company Peugeot was first revealed in 2016. Fifteen months later, the production version is launched. Now, Peugeot is not shying away...
by - June 24, 2017
The new Jaguar E-Pace crossover will soon hold its official launch on July 13 and is expected to arrive at the showrooms by early next year. It couldn’t have come...
by - June 24, 2017
As prices of the original Shelby Cobra have skyrocketed into astronomical proportions, there are firms like Superformance that serve replicas to consumers who demand the same levels of performance at...
by - June 24, 2017
New and improved 2018 Subaru Legacy comes packed with a number of upgraded features from the get go - from the exterior to the interior. And the company has finally...
by - June 23, 2017
In an interview involving Lamborghini CEO Stefano Domenicali and Automotive News, the topic about the Urus was thoroughly discussed. This super SUV is scheduled to make its debut later this...
by - June 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries