Majority of Americans today choose to rent instead to buy personal vehicles. Approximately 1/4 of the number of new car deals in the U.S. during the first quarter of 2014 was leasing, the highest rate since 2000.
Not only is the percentage figure, leased vehicles are also changing. Leasing plays a major role in the U.S. luxury car market for many years, but in recent years this trend spread to ordinary vehicles.
In 2002, the proportion of new vehicles Ford, GM, Hyundai and Kia leased was not significant. Currently, these figures are 20% or more, according to data from JD Power & Associates. The amount also increases for other manufacturers of ordinary car market.
What is happening?
There are several reasons for this trend. First and most obvious is from a few years ago, lease becomes cheaper than to buy, at least in terms of monthly payments.
So what was the reason for cheaper car leasing everywhere? Generally because of the price of used car, which has historically been quite high in recent years, not many people provide this type of car. Scarcity stems from the sharp decline in car sales during the Recession. Used car market had lacked of effect lead to a reduction in sales between 2008 and 2010.
The reason leasing was cheaper, beacuse the monthly fee is generally paid for depreciation, ie the decrease in value between the time when the lease starts and end. When a monthly fee is low enough, after the car returned, it is still high in price and used car dealer still have profit. That stimulates new car rental fees reduced.
And lower price is a big deal to Americans, who are increasingly wary over by the wake of the Great Depression. "Monthly fee is best for our customers," Eric Lyman, vice president of ALG, a company that specializes in leasing cars.
Some worry that Americans is slowly making car leasing becomes social trends instead of as a traditional car ownership, similar to the way houseing moves. At the end of 2013, only 64.8% of families own houses, the lowest rate since 1995.