Leasing Playing a Large Part in New Vehicle Sales Growth

Automak­ers are bat­tling for lead­er­ship in the mid­size car seg­ment, and leas­ing has become a big part of their mar­ket­ing strate­gies. Toy­ota is using a $199-a-month lease on its Cam­ry to main­tain its posi­tion as the top sell­ing car in the US. While this used to be a tac­tic for lux­u­ry vehi­cles, leas­ing is now becom­ing more main­stream. Ford is using leas­ing to sell more Fusions and Hon­da is using that method to increase num­bers on its Accord.

Sol­id used car prices, low inter­est rates, and the appeal of low­er month­ly pay­ments with US con­sumers is dri­ving the leas­ing trend. Its reach­ing its high­est lev­el as a fund­ing source for new vehi­cle sales not seen since 2007. Leas­ing makes up at least 22.5% of new-vehi­cle sales this year, accord­ing to JD Pow­er and Asso­ciates. It’s help­ing US new vehi­cle sales reach a six-year high. At its present rate, new vehi­cles sales would hit 15.8 mil­lion this year, ver­sus 14.1 mil­lion last year.

Sol­id rat­ings in vehi­cle qual­i­ty and depend­abil­i­ty are help­ing leas­ing stay strong, and sol­id used car prices are help­ing resid­u­als keep their val­ue. Automak­ers will need to remain in a cau­tious stance for leas­ing to mer­it its worth – exces­sive leas­ing trans­ac­tions by automak­ers have hurt used vehi­cle val­ues and cap­tive finance arm prof­its in years past.

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