Leasing More Attractive Due to Higher Resale Values
When you lease a car, you're essentially paying for the depreciation cost. Since residual values have been going up, leasing has become a more attractive option.
The average length of a lease dropped to 41 months, which is much shorter than the 64 months of the average car loan.
Leasing is especially popular with luxury-car shoppers.
More than 59 percent of shoppers who chose Mercedes-Benz decided to lease the vehicle. For BMW, the figure was 57 percent.
It's important for consumers to make an informed choice between buying and leasing.
If the monthly payment is the same for buying as it is for leasing, and if you can handle the longer contract term - typically five years for purchase versus three years for a lease - you're still better off buying.
You wind up owning the car at the end of five years. And at three years, you at least have equity in the car.
If you do lease, it's recommended that you stick to a maximum of 36 months so that the vehicle will always be under the included bumper-to-bumper factory warranty.
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About The Author
Gregg Fidan is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.Latest Weekly Car Buying Tips
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