If you do decide to choose leasing, you should take a look around at advertised lease rates, and more specifically at what models are most frequently offered for lease.
June 2, 2006 (Press Release) --
If you do decide to choose leasing, you should take a look around at advertised lease rates, and more specifically at what models are most frequently offered for lease.
Leasing is often used to work in the favor of the automakers, who tend to make more of their cars with higher profit margins available for lease, and in that way they also move more of the models that are becoming a bit outdated and would otherwise be slower-selling. They also use their “captive” finance companies to offer discounted leases, sometimes based on boosted residual values.
Because lease payments are greatly determined by the residual value, looking up the residual of the cars you’re interested in is also a good thing to do prior to narrowing down the models on your shopping list. The leading authority for residual values in the leasing industry is the Automotive Leasing Guide. (You can find ALG’s Best Overall Resale Values on the ForbesAutos.com/cars.com co-branded site.) Vehicles with an unusually low residual value relative to their original price will be more expensive to lease, while those that keep their value better over time will represent the greater value. As a general rule of thumb, a good candidate for lease will still carry more than 50 percent of its value after two years.
Many of the premium brands are especially friendly to leases. While the overall percentage of vehicles leased sits at just around 20 percent — far lower than the over-30-percent figure attained in the early ’90s — the percentage of premium-brand vehicles leased ranks around 60 percent and ranges to near 80 percent for some brands, according to Tarry Shebesta, president of Automobile Consumer Services and LeaseCompare.com, an independent company that monitors the leasing industry. “Most of the high-end brands are over half leased…and BMW tries to get about a 70-percent lease rate,” Shebesta said.
Shebesta said that at present the best deals in leasing remain “mostly imports and high-end models that tend to hold their value.” As employee-discount and zero-percent-financing programs are phased out, automakers will “probably go more toward subsidized lease programs,” he said.
Even when automakers offer bargain leases that obviously don’t make them much money, they see benefits from leasing. There’s a stronger sense of brand loyalty among those who lease — customers are more than twice as likely to get into another car of the same brand as those who buy. And for dealerships, the clean, late-model cars that are turned in from leases are some of the most profitable and easiest to sell on the used-car lot.
If you do decide to lease, you should choose a vehicle that has a high record for reliability and quality. Beware that leased vehicles are likely more difficult to claim under lemon law, as the leasing company must make the claim, not you.
Source: http://search.msn.com
Posted by Bengt Halvorson
Leasing is often used to work in the favor of the automakers, who tend to make more of their cars with higher profit margins available for lease, and in that way they also move more of the models that are becoming a bit outdated and would otherwise be slower-selling. They also use their “captive” finance companies to offer discounted leases, sometimes based on boosted residual values.
Because lease payments are greatly determined by the residual value, looking up the residual of the cars you’re interested in is also a good thing to do prior to narrowing down the models on your shopping list. The leading authority for residual values in the leasing industry is the Automotive Leasing Guide. (You can find ALG’s Best Overall Resale Values on the ForbesAutos.com/cars.com co-branded site.) Vehicles with an unusually low residual value relative to their original price will be more expensive to lease, while those that keep their value better over time will represent the greater value. As a general rule of thumb, a good candidate for lease will still carry more than 50 percent of its value after two years.
Many of the premium brands are especially friendly to leases. While the overall percentage of vehicles leased sits at just around 20 percent — far lower than the over-30-percent figure attained in the early ’90s — the percentage of premium-brand vehicles leased ranks around 60 percent and ranges to near 80 percent for some brands, according to Tarry Shebesta, president of Automobile Consumer Services and LeaseCompare.com, an independent company that monitors the leasing industry. “Most of the high-end brands are over half leased…and BMW tries to get about a 70-percent lease rate,” Shebesta said.
Shebesta said that at present the best deals in leasing remain “mostly imports and high-end models that tend to hold their value.” As employee-discount and zero-percent-financing programs are phased out, automakers will “probably go more toward subsidized lease programs,” he said.
Even when automakers offer bargain leases that obviously don’t make them much money, they see benefits from leasing. There’s a stronger sense of brand loyalty among those who lease — customers are more than twice as likely to get into another car of the same brand as those who buy. And for dealerships, the clean, late-model cars that are turned in from leases are some of the most profitable and easiest to sell on the used-car lot.
If you do decide to lease, you should choose a vehicle that has a high record for reliability and quality. Beware that leased vehicles are likely more difficult to claim under lemon law, as the leasing company must make the claim, not you.
Source: http://search.msn.com
Posted by Bengt Halvorson
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