Land of the lease
More Americans are leasing their cars than ever before.
Thirty-one percent of new vehicles acquired in the first nine months of this year were leased, according to car shopping site Edmunds.com. That’s a record high, and it’s nearly double the percentage from a decade ago.
Leasing is attractive for several reasons. Monthly lease payments are usually lower than finance payments, and buyers accustomed to new technology can count on getting a new vehicle every few years. Millennials account for the most leases overall, but the fastest-growing group of lessees is consumers 75 and older. Leasing used to be confined to luxury cars, but no longer. For instance, lease rates for small pickups have more than tripled this year, Edmunds says. There is a downside for the auto industry. A glut of leased vehicles returning to the market as used cars can hurt sales of new cars. That pressures automakers to lower prices. In response, automakers have been lowering the allotted miles leased vehicles are allowed to travel. That helps ensure vehicles return in better shape and can be resold at a higher price.