As Interest Rates Rise, More Car Customers Opt to Lease Rather Than Buy

Washington DC April 5, 2006; The AIADA newsletter reported that as the cost of loans continues to rise with interest rates, more costumers are opting to lease rather than buy, said USA Today.

Last month, 19.8 percent of all new vehicles were leased rather than purchased, the highest rate in nearly five years, according to Edmunds.com.

Meanwhile, dealer financing on new car purchases has experienced a decline. Higher interest rates are not the only factor in the increase of leasing.

Incentive deals on leases are the highest since Edmunds.com started tracking them in 2002, according to the research website's industry market analyst Mike Chung. "This is a good way to retain their (automakers) good brand image while still offering deals to consumers," Chung says.