Leasing exploded in the 1990s as a more affordable way to acquire a new car or truck. But zero percent financing, stable vehicle prices and rising incomes are prompting more shoppers to buy instead of lease, according to the Grand Rapids Press
The percentage of new vehicles leased last year stood at 27.6 percent, the lowest rate since 1996, when 25.2 percent of all vehicles were leased, according to CNW Marketing/Research in Bandon, Ore. And so far in March, just 23.2 percent of new cars and trucks were leased, according to J.D. Power and Associates in Troy, Mich.
Leasing peaked in 1999 at 32.4 percent.
"There are still some decent deals out there, but they aren't what they used to be," David Bailey, general manager at Kool
Chevrolet in Grand Rapids, Mich., told the Grand Rapids Press
. Part of the move from
leasing was caused by low interest rate financing on new-car purchases, he noted.
"With zero interest financing, the consumer's calculus swings dramatically toward purchasing over leasing," said Paul Taylor, chief economist fir the National Automobile Dealers Association (NADA) in McLean, Va. In addition, Taylor said fewer businesses are leasing vehicles for employees because of the recession. "Mid-level managers' cars are one of
the first expenses to go in a downturn," Taylor said.