If you're noticing more ads for hot auto lease deals lately, you're not imagining things. Like Jason Vorhees, auto leasing keeps dying and coming back so many times it's getting hard to keep track.
Ward's Auto has an interesting article this month on a renewed leasing push by automakers:
Leasing took a hit in 2008 when the former Chrysler LLC stopped offering it and the former General Motors Corp. curtailed it months before both entered bankruptcy.
But the reorganized Chrysler Group LLC and General Motors Co. are back in leasing.
More ambitiously, so are some international-brand auto makers with high sales goals. Those include Hyundai Motor America Inc., Kia Motors America Inc. and Volkswagen of America Inc.
"Hyundai and Kia are refocusing their sales strategy to drive the leasing business," Lyman says. "And VW really is pushing leasing. VW is the most aggressive in marketing and focusing on its lease strategy."
At the back end, auto makers also use leasing to replenish the inventories of their popular certified pre-owned programs. Those offer consumers late-model used cars with low mileage and extended warranties.
All this adds up to leasing regaining a bigger share of the marketplace in the future, thanks to sweeter deals and, of course, heavy marketing by automakers:
ALG predicts that by 2015, leasing will reach nearly 20%. Many industry experts consider that a healthy level.
I'm not surprising leasing is making a comeback, considering how used-car prices are rising and more people are in the market for CPO autos than in the past. But just because leases are a better deal for automakers these days doesn't mean they're a good deal for you. Thankfully, Bankrate has a lease vs. buy calculator that will help you figure out whether leasing is a good deal for you.
I'm personally not a huge fan of car leasing, unless you're a small business owner and can write the payments off on your taxes. While you've got to love the budget flexibility that low, low monthly payment gives you, most of the good lease deals are very restrictive in terms of the model you can get and the amount of mileage you can put on. Exceed those mileage limits, and suddenly a good deal can get pretty darn bad.
Maybe if you're the type to trade your car in every 3 years anyway for a newer model, leasing can at least minimize the financial damage of being a new-car lover. After all, unless your payments are extremely high, you're going to get little if any equity in your auto after three years of ownership anyway, so having nothing to show for all your lease payments wouldn't be a big deal.
And your total outlay would probably be less for leasing a new car every three years rather than buying a new one every three years.
What do you think? Do you lease cars? If so, why?