New data from market analysis company Experian Automotive shows auto leasing hit a record high with 27.6% of financed new vehicles purchases in the second quarter being a lease.
With the average transaction price (what buyers actually pay dealers) for a new car or truck now greater than $31,000, the average amount financed by buyers in the second quarter climbed $812 to $26,526. Also, in the second quarter, the average monthly payment for a new vehicle lease was $408, down $8 from the same period in 2012.
“Leasing has become very popular and it’s been rising steadily,” says Melinda Zabritski, Experian’s Senior Director of Automotive Credit. “Right now, the average monthly payment on a lease is about $50 less than it is for buying a new car with a traditional auto loan.”
Three years ago, just 17.7 percent of vehicles bought with financing were leased. But leasing has soared since then due to a combination of more aggressive leasing offers by automakers and buyers searching for the best option to keep monthly payments in check amid rising new car and truck prices.
Almost 20 percent of all new vehicle loans issued between April and June called for buyers stretching out payments over 6 to 7 years. Because they are taking out longer loans at interest rates that are usually just over 4 percent, many car buyers are changing their approach in dealerships and securing a lease plan.