WASHINGTON — The number of leased vehicles on the road has never been higher, and the highest concentration of leasing is in the luxury vehicle market.
Edmunds.com reports nearly 32 percent of new vehicle transactions are now leases, a record high, helping fuel record sales for the auto industry, even as the average age of a vehicle on the road is 11 years — also an all-time high.
“The most likely kinds of vehicles to be leased are generally luxury cars. It’s not unusual to see luxury cars where over half of the vehicles are leased,” said Jessica Caldwell at Edmunds.com.
Why the rise in leasing?
New vehicle prices are at record highs, and leasing is cheaper, with monthly payments an average of 23 percent lower than monthly finance payments.
And attitudes about leasing have changed.
“I think before, leasing was kind of seen as something frivolous people do. If you were a smart, savvy person with your finances, you didn’t lease, and we’re seeing that that is completely changing. Some of the stigma that you’re just wasting your money is gone,” Caldwell said.
Drivers have become accustomed to frequent technology upgrades and many now view a car that is more than three years old as outdated technology.
Edmunds says 2.2 million new cars, trucks and SUVs were leased in the first half of this year, an increase of 13 percent over the first six months of 2015, and double the number from just five years ago.
Millennials are the largest demographic for vehicle leasing, but seniors are the fastest growing segment of the population leasing new vehicles, with the share of drivers leasing who are older than 75 increasing by 74 percent since 2011.
Women also are slightly more likely to lease than men.
