Leasing makes monthly payments on higher-end models more affordable
Leasing premium automobiles is proving to be popular option among a new generation of car owners.
According to a recent report, consumers between the age of 18 and 34 -- known as Millennials -- are more likely to lease cars than Gen Xers or Baby Boomers. That said, all three demographic segments are showing a renewed interest in leasing as an option when purchasing a new vehicle.
Millennials turned to leasing for almost 30 per cent of all new car purchases in 2015. That compares to about 27 per cent for the entire U.S. population.
Millennials are also leasing more than ever, up almost 46 per cent over the past five years. Across all generations, about 42 per cent more cars are being leased in 2015 compared to 2010.
The report is based on analysis by Edmunds, a leading automotive information company.
"Most Millennials understand and accept that they're on a tight budget and that they need to stick to it," Jessica Caldwell, Edmunds.com director of industry analysis, announced earlier this summer. "But it doesn't mean that their financial constraints limit them only to the most basic vehicles to get from Point A to Point B. If they see a chance to get into a nicer car while staying within their budget, they're likely to explore that opportunity. In most cases, leasing opens the door to the bells and whistles that they couldn't otherwise afford."
Leasing is typically a more affordable way for people to be able to drive more luxurious vehicles and is often preferred by people who don’t want to be financially committed to the same car for the long-term.
After reviewing car registration data, Edmunds’ analysts found that 28.9 per cent of all new cars were purchased by Millennials through leasing.
Crunching the numbers even more, Edmunds showed that youthful shoppers have a ceiling on how much of their monthly budget they’re willing to spend on their automobile. A survey conducted by Edmunds and the research firm Morpace found that 57 per cent of Millennials will only pay $2,999 for a down payment on a new car while 54.9 per cent will only pay $299 per month on a purchase.
Shopping for a car with those constraints essentially limits the choice to new models that are less than $20,000. However, by leasing, budget-conscious consumers can stretch the same $2,999 down payment and monthly $299 payments to afford premium automobiles priced as high as $35,000.
More Canadian consumers are opting to lease when acquiring new and used cars.
Leasing fell to a low of seven per cent in 2009 but has since increased in popularity to the point where almost 20 percent of cars in Canada were leased in 2014. This is well below the 45 per cent peak in 2005 (a percentage greatly reduced when car manufacturers got out of leasing in 2008 during the global financial crisis and when credit markets seized) but leasing is an option more Canadian consumers are seeking out for new and used vehicles.
According to George Iny, president of the consumer group Automobile Protection Association (APA), leasing has the advantage of reducing monthly payments because consumers pay mainly for the time they have the car and the kilometres they put on it.
Speaking to The Canadian Press in June 2014, Iny went on to explain that leasing is attractive because there’s little maintenance while cars are under warranty and no worry about reselling at the end of the lease.
There are also other benefits, including:
• A monthly payment that is lower than purchasing a similar new vehicle.
• Low down payments.
• Taxes are calculated on the monthly installments instead of up front on the total purchase price.
Combined, many consumers find that they can afford a more expensive model if they choose to lease rather than buy.
If you are looking for the lowest possible monthly payments, or the best possible tax write-off, VPA LEASING will work with you to build the lease that fits your needs and budget.
VPA Leasing can help you source the vehicle you are looking for and arrange favourable leasing terms. Or, if you have found what you are looking for at another dealer – or even through a private seller - VPA LEASING can help you lease the vehicle.
VPA LEASING provides lease funding for new and used vehicles and equipment for individual contractors as well as small and large business owners.
Consumer Vehicle Leasing
Whether you are looking for the lowest possible monthly payments, or the best possible tax write-off, VPA LEASING can help you build the lease that fits!
Can’t find what you are looking for? VPA LEASING can help you find it!
Found what you are looking for at another dealer? VPA LEASING can still help you lease it!
Found a vehicle through a private seller? VPA LEASING can help you lease it, assist you with a trade-in, provide extended warranties, carproof, lien search and vehicle inspection!
Leasing is a very popular alternative to paying cash for your vehicle
The old adage, "pay cash for an appreciating asset and always lease a depreciating asset" still holds true today. Whether you are in the market for a new or pre-owned vehicle, leasing may be the answer. As vehicles are getting more and more expensive, leasing offers a lower monthly payment over a shorter period of time than traditional financing.
Commercial Vehicle Leasing
For many business owners in Canada, leasing is a tried and true method of financing both small and large vehicle fleets.
Leasing offers companies advantages such as:
Newer, better optioned vehicles for lower monthly payments
Lower initial cash outlay
Less initial tax outlay
At VPA LEASING, we provide lease funding for new and used vehicles and equipment for individual contractors as well as small and large business owners.
Vehicle leasing may not be for everyone. Paying cash is still the least expensive way of obtaining your next new or pre-owned vehicle.
We use well known banks, leasing companies, and private lenders. Please complete our Online Credit Application to begin the pre-approval process today and we will contact you after you've submitted the application.