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Low Monthly Payments Result In New Car Leasing Hitting Record High

Lease or Buy?

Washington DC September 4, 2014; The AIADA newsletter reported that the outlook for potential certified pre-owned inventory that dealers will need in 24 to 36 months just keeps getting more favorable, said Auto Remarketing.

Experian Automotive determined the percentage of new vehicles moved by franchised dealers and connected to a lease hit a new record during the second quarter. According to its latest State of the Automotive Finance Market report, Experian indicated that of all new vehicles sold in Q2, leases accounted for a record high 25.6 percent, up from 23.4 percent the previous year. And the majority of leases being written will leave those vehicles in the sweet spot to be certified — and CPO continues to grow in the used-car business.

Experian pegged the average term at 35 months, while 70.06 percent of all Q2 new-model leases fell between 25 and 36 months. On average, lessees are paying $407 monthly, according to the report. Experian noted that only one vehicle — the Nissan Altima — had more leases written in the second quarter of last year than this past quarter. The most significant year-over-year gains were posted by the Honda CR-V (2.2 percent to 3.1 percent), Toyota Corolla (1.9 percent to 2.5 percent), and Toyota RAV4 (1.3 percent to 1.8 percent).

Buy vs Lease Monthly Payments (Experian)

For dealers looking for material to show shoppers who are weighing the options between a lease and a financed purchase, consider this rundown Experian shared that highlight the top 10 models leased in the second quarter with the average payment figures:

Honda Civic
Loan Payment: $357
Lease Payment $247

Honda Accord
Loan Payment: $421
Lease Payment $320

Honda CR-V
Loan Payment: $401
Lease Payment $312

Toyota Camry
Loan Payment: $405
Lease Payment $299

Toyota Corolla
Loan Payment: $349
Lease Payment $259

Ford Escape
Loan Payment: $418
Lease Payment $327

Ford Fusion
Loan Payment: $415
Lease Payment $318

Nissan Altima
Loan Payment: $417
Lease Payment $297

Toyota RAV4
Loan Payment: $451
Lease Payment $331

Chevrolet Cruze
Loan Payment: $363
Lease Payment $234

For more on the state of leasing, click here.