New Auto Industry Study Reveals Vehicle Leasing on the Rise
If it seems like more and more car commercials are encouraging you to lease a new vehicle and more of your friends are, in fact, leasing instead of buying their cars, you’ve already spotted the new trend. According to data gathered by industry research group Experian Automotive, the number of people leasing vehicles is at an all-time high.
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According to information in the latest State of the Automotive Finance Market report, a third of new vehicle transactions in the first quarter of 2016 were leases, with used vehicle leasing on the rise too. This increase in leases is due to many factors, including the rising cost of loans, rising vehicle costs, and rapidly-changing industry. In many ways, it’s not as practical to purchase a brand new, expensive car and drive it for 10 years when the industry is churning out new advancements every year.
“The continued rise in new vehicle costs have kept many consumers exploring options to keep their monthly payments affordable,” said Melinda Zabritski, Experian’s senior director of automotive finance. “As long as vehicle prices continue to rise, we can expect leasing rates to grow along with them.”
In addition, the report also concluded that customers with lower credit scores are getting new cars more than before, and customers with higher credit scores are getting used cars more than before. Because of that, the amount of new vehicles being financed has risen–with the average new vehicle loan reaching a record-high $30,032.
With the many changes and advancements in the auto market, it’s no surprise that we’re seeing a slow but noticeable shift in consumer habits.
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News Source: Experian