Vehicle leasing makes a comeback |
|
|
|
Hinnant says that Navy Federal
offers leases that start at 24 months and go up to 60 months. Navy
Federal can also offer sales tax exemptions in states that apply
because they are a government agency.
Mileage standards on leases can also be adjusted,
but at a price. The normal 15,000 miles-a-year can be pushed up
if you think you will go over the limit. The mileage standards range
from 10,000 to 20,000 miles a year depending on the manufacturer's
leasing options. However, it's a better bet to lease a vehicle with
low mileage terms because the higher the miles the higher the monthly
payment.
While mileage options and leasing terms might appeal
to the consumer, the main issue remains the monthly payment.
"For most consumers, low monthly payments are
the incentive that gets them into a lease," says Hinnant.
Some credit unions, like Navy Federal, offer potential
customers no penalties for early termination and no sales tax on
the lease in states that apply. However, some manufacturers are
also offering lease programs which allow a customer to get out of
a lease if they want to buy or lease another vehicle.
In 2005, General Motors offered their leasing customers
the chance to return a car if they were not satisfied. The "Freedom
Program" was offered to consumers in six states allowing them
to return one of three models before they had driven 12,000 miles.
A lessee would lose only their down payment.
Litwer says, "Consumers don't want to be used-car
salesmen; therefore they consider the economics of leasing a car
and the ability to return the car and get a new car at the end of
the term."
Litwer expects the high-end vehicle leasing market
will go up 50 percent or more by 2007.
Both automakers and consumers have gotten smarter
in the leasing game. Auto makers who once flooded the market with
lease deals that left them with a deluge of low-mileage, off-lease
vehicles in the late 1990s are now better prepared with offering
off-lease vehicles through their certified used vehicle programs.
"The trend seems to be that captive leasers
stick with shorter terms. They try to discourage leases past 36
months because they want to certify the car and it's much easier
to certify a newer car than an older car," says Shebesta.
Consumers will gravitate toward the best deals whether
the deal comes from a captive lessor, a credit union or an independent.
"People know what they want, how much they can
afford and how long they want the car," says Lewig.
The number one rule in leasing is for consumers to
know exactly what they need in terms of monthly payment, length
of lease and mileage.
"If you are completely honest with yourself and
know beforehand what exactly you want and need, leasing will leave
you very satisfied," says Litwer.
Automakers and financers want repeat customers and
leasing offers them a better chance at bringing them back.
|
