A few years back, leasing looked to be in danger of almost becoming a dinosaur. After going strong for years, shoppers—presumably reacting to the recession in 2008—turned abruptly away from leasing. During his Presidency, George W. Bush had promoted an “ownership society.” As far as cars were concerned, at least, the desire for ownership rather than accepting a limited-term lease looked to be the wave of the future.
Well, things change; and within a year, the number of people turning back to leasing began to grow—slowly but steadily. In April-June of 2012, leasing accounted for 24.4 percent of new vehicles financed. That happens to be the same lease percentage seen back in 2008, before leasing took a precipitous slide downward (only 17.7 percent in the second quarter of 2009).
“Overall, we’re seeing leasing pretty flat,” said Melinda Zabritski, director of automotive credit for Experian, in her quarterly report on the state of the auto-financing business. But it’s definitely back on track. Historically, she noted, leasing has accounted for 24 to 25 percent of the market.
Auto leases might be taking new forms, however. According to a recent national study by Swapalease.com, a firm that specializes in “car lease swapping,” 42 percent of drivers who lease a vehicle prefer a contract that lasts no longer than two years. That figure stands in sharp contrast to leases of the past.
“Prior to the recession, the majority of drivers were interested in a 48-month lease term,” says Scot Hall, executive vice-president of Swapalease.com. “We believe today’s driver has a pay-as-you-go mentality, and the fear of longer-term commitments from the recession lingers in many minds.”
Reasons for leasing rather than purchasing haven’t changed all that much, according to the study. Of those surveyed, 41 percent said they believe the top benefit is that you get “more car for your money.” Lower upfront costs are another factor in choosing leasing over buying. Perhaps most notably, 24 percent said they liked the fact that leases are for “shorter terms than traditional financing.” Only 5 percent mentioned the possibility of buying the leased car at the end of the term as a major motivator.
Just over half of the respondents stated that mileage restrictions for the lease term are the foremost obstacles to deciding on leasing. No one likes to pay those extra per-mile charges for going over the stated maximum. Only 18 percent of respondents put the fact that you never own the car at the top of their list of negative factors. Nearly as many (14 percent) expressed concern about the “wear-and-tear” requirements that are found in all leasing contracts, and could bring an unpleasant surprise at the end of the term. One-tenth of those surveyed expressed concern about the tighter credit requirements that apply to leasing, compared to regular financing.
So, will they lease again, after the current term is up? Some 63 percent of respondents stated that they were likely—or even extremely likely—to sign up for another lease.
US News & World Report recently published their best lease deals list for September 2012. Click on the models below for features, photos, pricing, and reviews: