| Auto Leasing |
What is the EASIEST way to know
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Auto leasing can be good or bad, the important factor is to be informed about the ins and outs of the contract and basics so you can make a sound decision.
Auto
Leasing is a good way to get the car you want at a lower
payment.
But make no mistake about it, buying a car (whether cash or financed) and keeping it for a long time is still the least expensive way to go.
However, there
are times when auto leasing may be a good option for you.
OK..
you've just graduated from school and or starting a new job. You know that your
income will be going up and you want reliable transportation now.
An auto lease could
be appropriate for you.
You have a young family and need a mini van or SUV, an leasing
may be the only
affordable way to get the vehicle you want.
Or maybe you just want more in the way of options, power leather seats,
4wd, top of
the line sound systems to mention a few.
The goal is to give you some facts about auto leasing
so you can make
a decision to lease or buy.
When you get through
reading just click here Lease Wizard to find out and what your best auto leasing
option is.
With the initiation of Reg M and the resulting fuller
disclosure of auto lease information, many expected auto lease penetration
and volume to moderate or flatten.
Government hoped auto leasing would
disappear or at least decline
because of the negative impact it can have on
tax revenue.
Auto Leasing probably had its best year ever in 2002 in terms of
volume and
share of new-vehicle acquisitions.
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A record auto lease year even with Reg M, more disclosure, less interest in
auto leasing by automakers' captive finance companies, lower used car values
and Attorney Generals and media who consider auto leasing as as a way to rip
off Americans.
A national network news program intending to do an auto leasing bashing
story got postponed because they couldn't answer this question:
If leasing
is so bad, then why do 85 percent of auto lessees lease again?
( The
remaining 15 percent, half elect to finance a vehicle while the other half
simply drop out of the market altogether.)
A lot of sources forget, consumers, are the final authorities
of whether auto
leasing succeeds or fails.
Not lease companies, dealerships, vehicle
manufacturers or the media.
Then why do people lease instead of buy ?
How do auto lessees differ from
new-car buyers?
From a national survey consumers were asked how much they
agreed or
disagreed with the below Question.
They were asked to tell researchers how much
they agreed or disagreed with
the following:
'Older cars are a hassle to maintain."
About one third of those who purchased a
new vehicle strongly agreed with
that statement.
The overall average response was 3.9 (out of a possible 7).
Of new vehicle lessees, on the other hand, 57 percent agreed strongly with
the statement that older cars are a hassle to maintain.
The average score:
4.8
The general conclusion of the study:
Lower payments are important on the
surface,
the make up of auto lessees is distinctly different from buyers.
Lessees are inherently more attuned to simplifying their lives,
avoiding
automotive hassles and showing off their good fortune.
Consumers like convenience and not having to think much about
the nuts and
bolts of acquiring what they drive.
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Some examples:
About half of lessees
compared to 38 percent of buyers agreed strongly that it's a hassle to trade
in a vehicle. Among both buyers and lessees, about three quarters said they
didn't like dickering over price of a new vehicle.
It would appear that
attitude encouraged lessees to auto leasing where, they say, they rarely
haggle over a vehicle's price.
If auto leasing is less disruptive to their lives at time of acquisition,
lessees feel more frequent trades will eliminate another possibility:
Being
stranded.
About 80 percent of lessees compared to
70 percent of buyers said
they really hate the notion of a mechanical
problem leaving them stuck at
the side of the road.
Even though 80 percent of lessees think older cars break down, because most
lessees are going to trade in a vehicle when that car or truck is still in
its prime, they're not willing to spend a lot of time maintaining their
vehicle.
About half of auto lessees say they don't want to
be bothered with
a vehicle's maintenance.
Some of this seeming self indulgence can also be found in how lessees view cars in
general.
How important is it to have a vehicle that's fun to drive?
Overall,
only 13 percent of lessees said they strongly agreed.
But even at that, it's
significantly higher than found among buyers.
Lessee are nearly three times
more likely than buyers to say
passenger comfort is important to them.
Auto Lessees are also 50 percent more likely to want
vehicles loaded with
options, according to the study.
When asked if the respondent simply got tired of driving the same old "car"
year after year, two-thirds of lessees said "yes" compared to less than 40
percent of buyers.
The fact is this:
Lessees like to lease because it removes
a lot of the hassle of new-vehicle acquisition, provides a new set of wheels
with the latest features and provides some level of status, impresses the
family, friends and co-workers, eliminates concerns that plague owners of
older vehicles (such as breakdowns) and generally results in a vehicle that
looks good on the driveway.
Auto lessee's mental attitudes in general that can be read in the study.
For
example, better than 40 percent of lessees said they prefer to drive a car
with a strong personality of its own. This compares to only 17 percent of
buyers. And, while such programs as Dateline and newspaper articles want to
point out that auto leasing is supposedly more expensive than buying a car
or light truck, lessees don't seem to care.
About 30 percent said it's worth the extra cost to drive an attractive and
attention-getting car while less than 20 percent of auto buyers agreed with
that statement.
Will disclosing more auto lease information hurt leasing?
Not according to
the respondents. Only 19 percent said they intended to buy their lease
vehicle. (Remember: Intentions are not actions.
Only 12 percent actually buy
their leased vehicle and keep it as the primary vehicle for more than six
months.)
About 5.5 percent of lessees strongly agree that they feel someone is
watching how they drive, statistically not much different than the 2.2
percent of buyers. In fact, in the highly charged world of class action
lawsuits and better disclosure regulations, annual mileage is barely more a
concern among lessees than buyers. Only 5.4 percent of lessees and 4.8
percent of buyers say they think about the
number of miles they are putting
on their vehicle.
In fact, only 3.5 percent of auto lessees, compared to 4.3 percent of
buyers, say they are very concerned about the number of miles they are
putting on a car. Put another way, auto lessees may think about the number of
miles they're accumulating, but they really aren't all that concerned about
it.
Of those auto lessees who actually showed a concern over the mileage issue,
better than half were first-time lessees and virtually all were in a
12,000-mile or 10,000-mile agreement.
When it comes to taking care of a vehicle, lots has been said about lessees
being less likely to perform proper maintenance. In reality, buyers and
lessees are more alike than not. The difference, the study shows, is that
lenders simply scrutinized lessees more closely because the vehicle remains
the lessor's property and has to be disposed of later.
In fact, the only significant difference in attitude can be found in the
application of bumper stickers. Auto lessees don't apply them as often as
buyers.
Barely 10 percent of lessees said that leasing was cheaper than buying. And
only 6 percent of lessees said they couldn't afford to buy the same vehicle
they leased.
Barely 3 percent said they didn't have the money to make a new
vehicle purchase or the monthly income was too low to make a new-car
purchase payment.
About a quarter of respondents, however, said they leased because it was
more logical to invest funds than spend it on a new car or truck.
In fact,
about 28 percent of lessees said money saved by auto leasing rather than
buying would be invested somewhere like the stock market or a money market
account.
Overall, what was learned from the study?
It basically said this:
Some consumers will lease cars, others will buy
them.
Marketing can be aimed at selected groups who have particular
attitudes and the result will likely be more efficient use of marketing
money.
The auto leasing alternative is being driven by consumers wants and
needs.
Auto Leasing vs
Auto Buying
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