Phone: 630-495-2282 Fax: 630-495-2260 Map/Directions

Low interest rates, high resale values fuel auto leasing rebound

March 16, 2012
Leasing roared back to life last year, fed by an ideal — and unusual — combination of low interest rates and high trade-in values.
“I wasn’t really in the market for a new truck,” said Roger Cade, 58, who lives on a ranch outside Terrell, Texas. “But it made it possible for me to consider a vehicle that was $10,000 more than the one I had previously.”
Leases also guarantee that dealers will get vehicles back in two or three years — lightly used late-model cars and trucks that they can put directly onto their lots.
“We will see more two- and three-year leases, and that means we’ll see more fresh cars returning off lease,” said Paul Taylor, chief economist of the National Automobile Dealers Association. “That’s good for the industry.”
Before the 2008 recession, when leasing nearly collapsed, it accounted for about one-fourth of new-vehicle sales in the U.S. and was a critical tool for automakers and dealers. Industry experts are predicting a rebound this year to 30 percent or higher.
One of leasing’s biggest attractions is that it typically offers lower monthly payments than a sale. Some analysts think the growth of leasing could help propel U.S. sales past 14 million this year.
Automakers sold 12.8 million vehicles last year.