A recent study by Experian Automotive showed a change in car buying trends. Forget the price tag; more buyers want to know how much a car will cost them monthly.
The rise in the average monthly payments for car loans have buyers seeking ways to reduce their expenses and even opting for vehicle leases instead. Experian Automotive reports that leasing accounted for 29.1% of all new vehicle financing for the third quarter of 2014. Experian senior director for automotive finance Melinda Zabritski says motorists are opting for longer lease terms to dilute monthly payments.
Monthly lease payments are lower than full-ownership car loans because they're determined by the value of the car at the start and end of the lease period. To put things in perspective, say you want an SUV worth $32,000 that comes with a five-year loan at 3% APR. Without any additional payments, you'll have to pay $575.00 every month for that SUV.
Compare that to a five-year lease for the same vehicle. By the end of the lease, that SUV will only be worth around $19,000 (given depreciation). Without any additional payments, the monthly payment will be more or less $280.42. An actual lease also takes into account the down payment, which may drive the monthly payment even lower.
Leases have a yearly mileage cap (usually 10,000 to 12,000 miles), but that won't be much of a concern if you just need to get around the big city or nearby areas on a regular basis. You get the perks of driving a new car while paying for much less. At the end of the lease, you can choose between a new lease and buying the old one at its residual value.
Overall, leasing is a quicker and less expensive way to get a car. Many dealerships such as Baldwin Subaru throw in sweet deals with vehicle leases for Subaru around New Orleans. You can ask for the breakdown of monthly expenses to have an idea of how much the lease will cost overall..
Leasing New Orleans Subaru cars is a great option, especially if the restrictions do not bother you at all. Vehicles on lease typically do not need any extensive modifications or frequent maintenance. At any rate, be sure to keep the car well preserved so you don't risk incurring any penalties.
(Source: "Why auto leases are surging," ConsumerAffairs.com, December 11, 2014)
