Option to lease a car roars back to highest rate since 2005

2011 Chevrolet Cruze
2011 Chevrolet Cruze

Leasing a vehicle, an option that once dried up with credit during the recession is rebounding strongly – another sign that the economy is improving and the automotive industry is getting back up on its feet. That’s good news for you folks that like leasing since it gives you the option of low monthly payments and the ability to switch cars ever couple of years.

“It really has stormed back,” said John Sternal, vice president of Leasetrader.com. “Just 14-16 months ago, that was unheard of.”

According to The Detroit News, the trend reflects improving economic conditions, with credit markets being nicer and banks lending more freely. Automakers are now advertising eye-catching offers and low monthly payments as consumers rush back into dealerships to lease new cars and trucks. Leasing has roared back to its highest rate since 2005.

Nonetheless, analysts say that leasing has its downside. Since leased cars are resold every few years, flooding the market with used cars, it hurts a model’s resale value. Either way, automakers and dealers like the leasing option since it drives sales and keeps people like you coming back into dealerships.

In March, lease accounted for an estimated 21 percent of new car sales.

– By: Omar Rana

Source: Detroit News