Car Leasing Surges In 2013
Last month the resurgent popularity of leasing helped carry the US auto industry to the highest sales levels since September 2008.
The old adage — never invest in a depreciating asset — makes a lot of sense these days as interest rates remain low and consumer confidence and demand for new cars is high.
Simply put, a $30,000 investment buying versus a $10,000 expense to lease a vehicle for the same time, provides the same utility at a lower monthly cost. And business owners and independent contractors can claim added tax advantages.
With the new longer term leases, based on the better longevity and reliability of modern vehicles, consumers can trade up from a VW to an Audi or BMW based on the monthly cost.
And while leasing is now again very popular it is important for first-time leasing customers to consider some key factors.
The leasing company makes money on the car’s residual. While most of the major issues with the vehicle are covered under the new car warranties, proper care and maintenance by the driver is essential…as repair and mileage cap overages can be a costly surprise and the end of the lease.