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.