A surge in car leases is helping to boost the popularity of new cars, reports Edmunds.com, a premier resource for car shopping and automotive information.
New cars account for about 29 percent of all sales through May of 2013, according to an Edmunds.com analysis of vehicle registrations from Polk. That puts the year on pace to top last year’s rate of 27.6 percent, the highest penetration of new cars in at least five years.
Helping to drive this trend toward new cars is a sustained push in leasing.
Edmunds.com found that 25 percent of new cars sold this year were leased, which means the industry is on track to smash last year’s record lease penetration rate of 22 percent.
“Lease offers have become more important to automakers’ and dealers’ sales strategies,” says Senior Analyst Jessica Caldwell of Edmunds.com. “Luxury brands have for a long time relied on leasing to maximize their sales volumes. Now mainstream brands are riding that wave, drawing buyers with the promise of lower monthly payments through leasing.”
Shoppers are turning to leases now more than ever – a monthly lease payment is often less than the monthly payment on a new or even a used car. In fact, the difference between the average monthly lease payment ($433) and the average monthly finance payment ($468) is greater than at any time since Edmunds.com started keeping records.
Sometimes, a leased car can hold its value especially well, says Edmunds.com, making its residual price a bargain to pay in order to take home the car at the end of the lease. In some cases, lessees can leverage equity that they’ve built up in a leased car putting money in their pockets. Finally, lessees might be able to enjoy a tax benefit if they use the leased car for work (though you should talk to your tax planner to understand whether you qualify).
There’s no hard-and-fast rule that says car shoppers should focus on new cars or used cars, or if they should buy or lease, says Edmunds.com. But if a car shopper understands the advantages and disadvantages – as well as the math – behind each option, the choice can be a lot easier. Edmunds.com explains all the pros and cons in the article “Comparing Car Costs: Buy New, Buy Used or Lease?” by Philip Reed, Edmunds.com senior consumer advice editor.
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