Auto leasing more popular than ever, but comes with costs [Video]
Posted on Monday, December 14, 2015 at 3:21:22 PM
This year has been the best for auto sales in more than decade - October's sales were the highest recorded since October 2001 - and it became clear recently just how much auto leasing has contributed to the year's stellar numbers. Experian Automotive announced early in December that auto leasing accounted for about 27 percent of all new vehicle sales in the third quarter, the highest proportion the company had seen since it began to publicly disclose its data in 2006.
"As the price for a new or used vehicle continues to rise, leasing has become a more viable financing option for consumers looking to maintain an affordable monthly payment," said Melinda Zabritski, Experian's senior director of automotive finance. "While consumers can save an average of $84 per month by leasing rather than taking out a loan on a new vehicle, they should make sure leasing fits their lifestyle."
Too many consumers are seduced by the short-term savings of leasing and become embroiled in stressful payment patterns while extending their leases to keep monthly payments low. The New York Times reported that loans continue to get longer, keeping buyers for years at a time. Auto financing, on the other hand, provides the opportunity to purchase a new vehicle without unending commitments.