Why is Car Leasing Popular?
This past Mother’s Day the Tristate Auto Champs staff were out to dinner, and one of the staff members mother asked why so many people are leasing new cars compared to 20 years ago. While we all tried to answer her question, I realized every staff member had a different valid point. Low payments, lower cost of ownership, under warranty, savings, value, etc. Which brings us to our next automotive blog on why car leasing is so popular. Here are our top reasons why leasing cars has become increasingly popular.
The first major factor that helped cause the shift to automotive leasing could be summed up in one word… value. New car prices have rapidly spiraled upwards over the last few years to meet the high customer demands for technology, power and fuel efficiency. In the past, this often put prices out of reach for the average buyer. Today’s drivers want more for their hard earned dollars. 10 years ago when you went to buy a new car, the focus from most car makers was one of many “hot buttons”. One brand would push how safe their car was. Another would talk about how many miles per gallon you would receive, or the horsepower and torque. This list could go on forever, but the point we are making here is that today’s buyer doesn’t want one thing. They want it all and you shouldn’t have to settle when picking up your new car. With such high expectations and lower budgets, the automotive industry had two choices; Either lower the price of their cars or come up with an affordable ownership option.
Secondly, the increased national cost of living; housing, food, and other necessities of life have left less money in many families’ monthly budget for their automotive needs. While consumers love a great deal
, and want to see value in their daily driver, nobody wants to pick between going out to dinner and making their car payment. For savvy consumers, leasing allows them the opportunity to have more money in their pocket at the end of each month. Don’t forget the lessor typically has more risk than the lessee, if you pick the correct type of lease.
The final major factor causing the leasing increase over the past few years is that people are more educated about automotive leasing now than they were 20 years ago. Consumers now know what to look for, how to calculate their own leases, what a good lease is, and which type of lease they should consider. Lessees who have had bad experiences in the past know what the common mistakes
are and how to avoid big fees. Automotive leasing has changed dramatically in the past 5 years, let alone in the past 20 years. The days of car dealerships making huge gross profits are long gone, and now the entire business is focused around customer retention, and brand loyalty. This is a good thing because it makes it a more consumer friendly market.
Let’s face it, transportation is a necessity in most parts of the country. We need cars to run errands, get to work, and go from one place to another. The after effect is that people have become increasingly eager to find ways to make personal vehicles more affordable and save money for more important things. In recently years, leasing companies have found new ways to fill this demand with new car leasing programs. It’s a win-win situation for both car manufacturer’s and consumers. Car makers get to sell more cars more often, and consumers get to drive newer cars more often. The cost of ownership is less overall for the consumer and you don’t have to worry about costly repairs during the lease term.
In conclusion, leasing has become popular because it offers people a way to drive the vehicles they want — often better vehicles than they could typically afford— for less money and less hassle. Low monthly payments are the big attraction, although we’ll soon find out why it’s important to look at other factors before deciding to lease. Continue reading our automotive leasing series to learn everything there is to know about new car leasing in today’s automotive marketplace.