Batesville Herald Tribune, Batesville, Indiana

Community News Network

August 1, 2013

Auto leases on the rise

(Continued)

SOUTHFIELD, Mich. —

The industry sales pace for the month keeps the U.S. on track for its best year since 16.1 million vehicles were sold in 2007. It's also further evidence of the disparate paths of the American auto industry and the city of Detroit, which filed the nation's largest municipal bankruptcy in history this month.

The reasons for leasing's strength extend beyond the race for the top-selling U.S. car. Industrywide gains in product quality and strong used-car prices allow automakers to project higher values for their vehicles when leases expire. This trend is combining with record-low interest rates in allowing the companies to offer cheaper monthly payments.

Leasing has historically tended to be more common on high- end models, accounting for roughly half of sales for some. David Welch, a product manager for a technology company in San Jose, Calif., signed a two-year lease on a Mercedes E350 4Matic during the Fourth of July weekend.

"Moving into luxury cars, it made so much more sense to rent them than to buy them," Welch said in a telephone interview. "For two years, I've got a car where I've only got to put gas and insurance into it."

Leasing's expansion into more mainstream segments also can cultivate loyal customers who can move up into higher-priced vehicles for their future purchases, said Kevin Tynan, an auto analyst for Bloomberg Industries in Skillman, N.J.

"It does create move-ups," he said. "Instead of being in a compact car and having to lease, you'll get people up from compact cars into mid-size cars by being aggressive there."

Buyers are showing "growing acceptance" of leasing in more segments, including mid-size cars, said Bill Fay, a Toyota group vice president. The prices paid for Toyota's vehicles at the end of their lease, known as resale or residual values, tend to rank among the highest in the industry.

Text Only
Community News Network
Featured Ads
AP Video
Ariz. Inmate Dies 2 Hours After Execution Began Crash Kills Teen Pilot Seeking World Record LeBron James Sends Apology Treat to Neighbors Raw: Funeral for Man Who Died in NYPD Custody Migrants Back in Honduras After US Deports Israeli American Reservist Torn Over Return Raw: ISS Cargo Ship Launches in Kazakhstan Six Indicted in StubHub Hacking Scheme Former NTSB Official: FAA Ban 'prudent' EPA Gets Hip With Kardashian Tweet Bodies of MH17 Victims Arrive in the Netherlands Biden Decries Voting Restrictions in NAACP Talk Broncos Owner Steps Down Due to Alzheimer's US, UN Push Shuttle Diplomacy in Mideast Trump: DC Hotel Will Be Among World's Best Plane Crashes in Taiwan, Dozens Feared Dead Republicans Hold a Hearing on IRS Lost Emails Raw: Mourners Gather As MH17 Bodies Transported Robot Parking Valet Creates Stress-free Travel Raw: Fight Breaks Out in Ukraine Parliament
Seasonal Content
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Facebook