Auto lease rates reach all-time high
According to a recent report by Experian, leasing cars is more in vogue now than ever before. Find out what’s motivating buyers today.
If you haven’t already felt the shift, be prepared to possibly sell more leases this year. According to a recent report by Experian, leasing cars is more in vogue now than ever before. While just five years ago, 24.05 percent of vehicle purchases were leases, today the number has risen to a record 31.46 percent.
“Leasing has become more popular because the price of vehicles continues to go up,” Senior Director of Experian Automotive Melinda Zabritski told CNBC. “Consumers are looking for lower monthly payments, which is why more of them are extending the terms of their loans.”
Research by Experian indicates that the monthly payment difference between car purchases and leases varies nearly $100, according to Zabritski. Further investigation also revealed that while monthly payments for car purchases have risen approximately $14 since last year, the monthly payment for car leases has actually dropped about $7.
In similar fashion, the study revealed that those drivers who are still purchasing vehicles are now opting to extend the terms of their loan even longer. Loan terms ranging from six to seven years have reached a record-high 29.5 percent, while loan terms ranging from 73 to 84 months have risen 18.6 percent.
Factors that influence this change in buyer habits filter down from one important fact: the prices of new vehicles have continued to rise. Because of this, consumers have sought out the best options that offer the most flexible terms and lowest payments.
Auto dealers can benefit from this knowledge by getting to know their customers. By identifying what their personal needs and goals are for their next purchase, dealers can point drivers in the best possible direction and even tailor their offerings to best meet their shoppers’ needs.