Vehicle leasing hit a new record in February [Video]
Posted on Monday, March 7, 2016 at 12:09:46 PM
Vehicle leasing has proven incredibly popular over the last few years, and by all accounts its popularity continues to grow. The Wall Street Journal reported that vehicle leasing as a percentage of light vehicle retail sales reached a new monthly record in February, hitting 32.3 percent. That is significantly higher than 2015's average of 28 percent.
Part of leasing's attraction is how it offers drivers the chance to own a vehicle that would otherwise be far beyond their means. But it's important for drivers to remember that they don't actually own a vehicle under lease - their finance company does. Unlike with a cash purchase or an auto financing loan, their vehicle is not truly their own.
More than that, however, is the fact that leasing often means paying more for a vehicle than other payment options would require. Leasing is almost always more profitable for the seller than the buyer.
"Every dealer I know tries to convert people from a purchase to a lease," Earl Stewart, a Toyota dealership owner in North Palm Beach, told The Journal. He went on to say that whoever owns the lease stands to make about $1,000 more per vehicle than they would from a purchase.
So, before a driver signs a lease, it's important that they consider all options on the table.