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    Americans Are Leasing Vehicles At A Record Number


    • More Americans Are Choosing To Lease

    Prices of new vehicles are climbing to record highs and causing buyers to look at leases for lower monthly payments.

     

    According to CNBC, a new report from Experian Automotive found that 31.46 percent of vehicles sold in the first quarter were leased. This is up from the 24.05 percent who chose to lease five years ago. The report also reveals that that the average monthly payment for a new vehicle loan was $488, up $14. But, the average lease payment was down $7 to $405.

     

    "The difference between a monthly payment for those leasing a new vehicle versus those who buy new is almost $100," said Melinda Zabritski, senior director of Experian Automotive.

     

    "Leasing has become more popular because the price of vehicles continues to go up. Consumers are looking for lower monthly payments, which is why more of them are extending the terms of their loans."

     

    Source: CNBC

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    Industry wide this is definitely true, though for some reason it is not remotely the case in our location.  We are lucky to get maybe 10% of sales as leases, most it seems would rather just try and get extended terms to get that payment down.

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    I think this goes right along with the news story about 84 month finance terms.  We're setting ourselves up for another financial bubble where people "move up" through longer financing terms instead of wage increases.

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    Is there not a disconnect where people looking for lower monthly payments IGNORE the fact that lease payments never end, whereas purchase payments do?

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    Is there not a disconnect where people looking for lower monthly payments IGNORE the fact that lease payments never end, whereas purchase payments do?

     

    Doesn't matter to them, they're going to want a new car in 2 - 4 years anyway. 

     

    We leased the Buick, but our reason for leasing was that we were anticipating a major life change after 2 years and we weren't sure if we were going to want the same sort of vehicle.  We were a 1 vehicle household if you don't count the Toronado which doesn't get used much. 

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    I believe the Auto industry will push all they can to move all auto prices up to force more and more into leasing as they would rather have a consumable market place with never ending payments to them. I can see the long term time get to where if you want an auto, you lease it and pay for the right to drive an auto with never ending payments.

     

    Those of us that hold onto auto's for a long time will become fewer and fewer.

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    Is there not a disconnect where people looking for lower monthly payments IGNORE the fact that lease payments never end, whereas purchase payments do?

    Very, very few of the customers I see have their vehicles long enough to pay them off, and I've not done a lease yet, so even the non-lease customers often will never reach and end to payments.  Heck, most of them are out looking to trade while they're still upside down on the car they want to trade in.

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    Is there not a disconnect where people looking for lower monthly payments IGNORE the fact that lease payments never end, whereas purchase payments do?

     

    Doesn't matter to them, they're going to want a new car in 2 - 4 years anyway. 

    Those people already were lease-ees.

    I don't think I understand someone who is going to complain about how much they are spending but then enter into a perpetual infinite monthly expenditure cycle.

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    I believe the Auto industry will push all they can to move all auto prices up to force more and more into leasing as they would rather have a consumable market place with never ending payments to them. I can see the long term time get to where if you want an auto, you lease it and pay for the right to drive an auto with never ending payments.

     

    Those of us that hold onto auto's for a long time will become fewer and fewer.

    I think that realistically those people have long been in the minority.  I just paid my car off back in March, and honestly I would love to trade for something different,  but I won't even realistically entertain the thought of doing something I know I can't afford like that.  I think the larger number of people that do hold onto their vehicles are probably more like me, they don't keep them because they don't want to trade, they keep them because they can't afford to do otherwise.  I don't hate, or even dislike, my current car, but I bought it because it fit my budget and needs, not because it excited me.  I would love to buy something that I'm actually excited to own, instead, but that just isn't in the cards.

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    Given the current financal climate this is hardly surprising.

     

    Only a matter of time now before leases start going up in price.

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    Is there not a disconnect where people looking for lower monthly payments IGNORE the fact that lease payments never end, whereas purchase payments do?

    Very, very few of the customers I see have their vehicles long enough to pay them off...

    That's because the people who DO pay them off don't go shopping nearly as often! ;)

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    Is there not a disconnect where people looking for lower monthly payments IGNORE the fact that lease payments never end, whereas purchase payments do?

     

    Doesn't matter to them, they're going to want a new car in 2 - 4 years anyway. 

    Those people already were lease-ees.

    I don't think I understand someone who is going to complain about how much they are spending but then enter into a perpetual infinite monthly expenditure cycle.

     

     

    They're probably already in that cycle. They buy, go upside down, trade in 3 - 4 years before the note is paid off, and roll the balance into the next car.  Leasing will probably cost them less money than that scenario.

    Don't get me wrong... I much prefer to buy and hold also.  I'm just explaining what I think is the reason for the shift. 

     

    Besides, GM says you don't even own your car anymore, you just license the software that runs it.

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    i never wanted to lease ever again but we leased our new town and country in January.  I could not justify 500/mo for an explorer/traverse or sim that was 3 years old and had 50k on it on a 5 year loan.  I chose to lease a new mostly loaded T/C for the same payment as to buy a 1-2 year old grand caravan with lesser kit and 30k on the odometer already.

     

    it comes down to stagnant wages vs. msrp's going way up, also in this instance, the residual after 3 years is far less than what the loan payoff would be at after 3 years on a traditional buy.  If the value tanks, I walk away or by then with so many leases out there, they may offer them for sale to the lessee for a price cut at the end.

     

    I don't want own a van anyways.

     

    Sure I am left with nothing but i paid 6 years on my Taurus X, the tranny started going out, and it was only worth a small dimple in the down payment of a new one.

     

    Yes there is a huge bubble coming, or......

     

    The automakers have succeeded in making a 'first market' where then they get the vehicle back after you paid most of the depreciation.  Then they get to sell the vehicle again as a CPO with low miles and make money on a new loan and sell extended warranties.....  The second cycle, people will trade it in at about the 6-7 year mark, 100k or so, and then the dealer will obtain that trade with you at a loss, roll your deficit into a new loan for someone else with low wage and bad credit......so they will be buying 6-7 year old vehicles at 12-18 percent and 5 years again and will be almost forced to get a warranty AGAIN.  Then once the vehicle is 10-12 years old, the vehicle hits the cycle again and money is made again.......

     

    Think of how much $$$$ banks make off that one vehicle over its life.  Think of how much states make off sales tax and vehicle tabs for that one car.

     

    I was all for paying off my cars but the last two i did, within less than a year, they had tranny issues and it was either put big bucks into them or take what i could get and put it into the new vehicle.  Just paid off the cobalt and now its approaching 100k, the past tells me my trouble free car, something will start to go amok, so i should go look for a lease.....can't replace that 207 payment with a 5 year loan comparable car for less than 300-350 unless i lease.... and even then that's still almost impossible.....

     

    My last few weeks in my selling cars gig i recall the people at the sister Ford dealer had been starting the lease push back again (2012).  The initial targets were like 30-33 percent lease and eventually over time if it hit 40% they said it was not impossible.  You get people on the 3 year cycle, just like cell phones, get people on a cycle where their decision is forced otherwise they sit and do nothing and spend no cash.

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    Given the current financal climate this is hardly surprising.

     

    Only a matter of time now before leases start going up in price.

     

     

    I've seen that here already. The local dodge dealership pretty much used to give leases away here....not any more. The Compass was a 150 buck special last year, cheapest lease this year is 300 bucks with money down.

     

    And they are selling more this year than last.

     

    I'm going to stay down at the small car level myself. Would love a colorado, but simply can't justify the 30k+ price tag. Thinking some sort of cruze, though I'm waiting on more info on the 2016....

     

    Then something well picked used for the wife....

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    Average new car price is nearing the average annual income of a person now.  Wages aren't going up as fast as cost of cars, education, insurance, etc, etc.   I think most Americans also live for the future and worry about current monthly budget and don't think about the payments never ending or what interest over 6 or 7 years is on a car.  So they look for the lowest payment for today, and worry about the future later.  But as Drew mentioned, that sets us up for another bubble to burst.

     

    Personally I like to buy used cars because the depreciation hit is gone, and then you have something to own that you can keep.    But I can understand why lease rates are surging.  Assume someone on a tight budget that can spend $200 a month on a car, they can either buy an $11,000 used car (which will probably be a 2007-2010) on a 6 year loan or get a 2015 Focus, Cruze or Elantra lease and have warranty, not have to worry about buying tires, making repairs, etc. 

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    Is there not a disconnect where people looking for lower monthly payments IGNORE the fact that lease payments never end, whereas purchase payments do?

    Very, very few of the customers I see have their vehicles long enough to pay them off...

    That's because the people who DO pay them off don't go shopping nearly as often! ;)

     

     

    Ha ... that'd be me. ;)

     

    Here in IL, the taxes for a lease have reportedly dropped by 50% ... so the leases here are that much more ... enticing.

     

     

    Cort :) www.oldcarsstronghearts.com

    1979 & 1989 Caprice Classics | pigValve, paceMaker, cowValve
    "Hood slidin' like Bo Duke"__Dierks Bently__'What Was I Thinking?'
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      All of Opel/Vauxhall’s European and U.K. pension plans, funded and unfunded, with the exception of the German Actives Plan and selected smaller plans will remain with GM. The obligations with respect to the German Actives Plan and these smaller plans of Opel/Vauxhall will be transferred to PSA. GM will pay PSA €3.0 Bn for full settlement of transferred pension obligations.
      Closing Conditions
      The transaction is subject to various closing conditions, including regulatory approvals and reorganizations, and is expected to close before the end of 2017.
      Warrants
      The issuance of the warrants is subject to the vote of shareholders at PSA’s General Meeting of May 10th, 2017. The three main shareholders of PSA (the French State, the Peugeot family and DongFeng) representing in aggregate 36.6% of the share capital and 51.5%7 of the voting rights of PSA have undertaken to vote in favor of the resolution related to the issuance of the warrants to GM. In the event the warrant issuance reserved to GM and its affiliates is not approved by PSA’s General Meeting, PSA will settle the €0.65 Bn in cash over five years.
    • By William Maley
      Only a few weeks after first learning about the talks between General Motors and PSA Group on the possible purchase of Opel/Vauxhall, Reuters reports that a deal has been reached.
      This afternoon, two sources told the news service the board of PSA Group approved the deal. An announcement about the purchase is expected on Monday. Also, Opel cut short a town hall meeting today at their headquarters in Ruesselsheim, Germany due to management being unable to discuss details about the potential acquisition. A town hall meeting possibly discussing this will take place on Monday morning.
      Details about the deal are being kept under wraps, but earlier in the week, sources revealed that the two parties had narrowed the differences on the almost $10 billion in Opel pension liabilities and other issues. 
      Source: Reuters

      View full article
    • By William Maley
      Only a few weeks after first learning about the talks between General Motors and PSA Group on the possible purchase of Opel/Vauxhall, Reuters reports that a deal has been reached.
      This afternoon, two sources told the news service the board of PSA Group approved the deal. An announcement about the purchase is expected on Monday. Also, Opel cut short a town hall meeting today at their headquarters in Ruesselsheim, Germany due to management being unable to discuss details about the potential acquisition. A town hall meeting possibly discussing this will take place on Monday morning.
      Details about the deal are being kept under wraps, but earlier in the week, sources revealed that the two parties had narrowed the differences on the almost $10 billion in Opel pension liabilities and other issues. 
      Source: Reuters
    • By William Maley
      Maserati North America, Inc. - Up 49% (1,087 Vehicles Sold This Month, 26,942 Vehicles Sold This Year)
      Mitsubishi Motors North America - Up 38.8% (10,924 Vehicles Sold This Month, 17,381 Vehicles Sold This Year)
      Audi of America - Up 17.3% (9,102 Vehicles Sold This Month, 26,942 Vehicles Sold This Year)
      Jaguar Land Rover North America - Up 16.4% (9,231 Vehicles Sold This Month, 18,333 Vehicles Sold This Year)
      Volkswagen of America - Up 12.65% (25,145 Vehicles Sold This Month, 48,655 Vehicles Sold This Year)
      Subaru of America, Inc. - Up 8.3% (45,500 Vehicles Sold This Month, 89,379 Vehicles Sold This Year)
      Mercedes-Benz USA - Up 6.8% (27,383 Vehicles Sold This Month, 55,283 Vehicles Sold This Year)
      Mazda North American Operations - Up 5.9% (22,824 Vehicles Sold This Month, 44,522 Vehicles Sold This Year)
      General Motors Co. - Up 4.2% (237,388 Vehicles Sold This Month, 433,297 Vehicles Sold This Year)
      Nissan North America - Up 3.7% (135,740 Vehicles Sold This Month, 248,059 Vehicles Sold This Year)
      American Honda Motor Co. - Up 2.3% (121,686 Vehicles Sold This Month, 228,066 Vehicles Sold This Year)
      Porsche Cars North America, Inc. - Up 2.1% (3,637 Vehicles Sold This Month, 8,239 Vehicles Sold This Year)
      BMW Group U.S. - Down 2.5% (208,440 Vehicles Sold This Month, 381,052 Vehicles Sold This Year)
      Ford Motor Company - Down 4% (208,440 Vehicles Sold This Month, 381,052 Vehicles Sold This Year)
      Toyota Motor North America - Down 7.2% (174,339 Vehicles Sold This Month, 317,387 Vehicles Sold This Year)
      FCA US LLC - Down 10% (168,326 Vehicles Sold This Month, 320,544 Vehicles Sold This Year)
      Volvo Cars of North America, LLC - Down 11.6% (4,651 Vehicles Sold This Month, 8,123 Vehicles Sold This Year)
      Kia Motors America - Down 14.2% (42,673 Vehicles Sold This Month, 78,299 Vehicles Sold This Year)

      Hyundai Motor America - 

      Brands:
      Acura - Down 14.9% (10,864 Vehicles Sold This Month, 20,066 Vehicles Sold This Year)
      Alfa Romeo - Up 843% (443 Vehicles Sold This Month, 551 Vehicles Sold This Year)
      Audi - Up 17.3% (9,102 Vehicles Sold This Month, 26,942 Vehicles Sold This Year)
      BMW - Up 0.3% (22,558 Vehicles Sold This Month, 40,667 Vehicles Sold This Year)
      Buick - Down 9.4% (16,131 Vehicles Sold This Month, 29,248 Vehicles Sold This Year)
      Cadillac - Down 8.6% (10,823 Vehicles Sold This Month, 21,121 Vehicles Sold This Year)
      Chevrolet - Up 3.4% (164,095 Vehicles Sold This Month, 299,265 Vehicles Sold This Year)
      Chrysler - Down 28% (16,730 Vehicles Sold This Month, 30,107 Vehicles Sold This Year)
      Dodge - Down 7% (43,878 Vehicles Sold This Month, 83,987 Vehicles Sold This Year)
      Fiat - Down 19% (2,145 Vehicles Sold This Month, 4,309 Vehicles Sold This Year)
      Ford - Down 4.5% (199,696 Vehicles Sold This Month, 363,523 Vehicles Sold This Year)
      Genesis - 
      GMC - Up 17.2% (46,339 Vehicles Sold This Month, 83,663 Vehicles Sold This Year)
      Honda - Up 4.3% (110,822 Vehicles Sold This Month, 208,000 Vehicles Sold This Year)
      Hyundai - 
      Infiniti - Up 32.5% (13,737 Vehicles Sold This Month, 25,295 Vehicles Sold This Year)
      Jaguar - Up 130.4% (3,484 Vehicles Sold This Month, 6,423 Vehicles Sold This Year)
      Jeep - Down 15% (62,345 Vehicles Sold This Month, 120,760 Vehicles Sold This Year)
      Kia - Down 14.2% (42,673 Vehicles Sold This Month, 78,299 Vehicles Sold This Year)
      Land Rover - Down 10.4% (5,747 Vehicles Sold This Month, 11,910 Vehicles Sold This Year)
      Lexus - Down 20.6% (18,338 Vehicles Sold This Month, 33.910 Vehicles Sold This Year)
      Lincoln - Up 8.8% (8,744 Vehicles Sold This Month, 17,529 Vehicles Sold This Year)
      Maserati - Up 49% (1,087 Vehicles Sold This Month, 26,942 Vehicles Sold This Year)
      Mazda - Up 5.9% (22,824 Vehicles Sold This Month, 44,522 Vehicles Sold This Year)
      Mercedes-Benz - Up 6.9% (24,522 Vehicles Sold This Month, 50,049 Vehicles Sold This Year)
      Mercedes-Benz Vans - Up 10.8% (2,513 Vehicles Sold This Month, 4,562 Vehicles Sold This Year)
      MINI - Down 24.1% (2,154 Vehicles Sold This Month, 5,264 Vehicles Sold This Year)
      Mitsubishi - Up 38.8% (10,924 Vehicles Sold This Month, 17,381 Vehicles Sold This Year)
      Nissan - Up 1.2% (122,003 Vehicles Sold This Month, 222,764 Vehicles Sold This Year)
      Porsche - Up 2.1% (3,637 Vehicles Sold This Month, 8,239 Vehicles Sold This Year)
      Ram Trucks - Up 4% (42,785 Vehicles Sold This Month, 80,830 Vehicles Sold This Year)
      Smart - Down 17.5% (348 Vehicles Sold This Month, 672 Vehicles Sold This Year)
      Subaru - Up 8.3% (45,500 Vehicles Sold This Month, 89,379 Vehicles Sold This Year)
      Toyota - Up 5.4% (156,001 Vehicles Sold This Month, 283,447 Vehicles Sold This Year)
      Volkswagen - Up 12.65% (25,145 Vehicles Sold This Month, 48,655 Vehicles Sold This Year)
      Volvo - Down 11.6% (4,651 Vehicles Sold This Month, 8,123 Vehicles Sold This Year)

      View full article
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