It's no secret that the credit market has tightened. Consumers face problems obtaining financing for mortgages and cars. These financial conditions may explain the growing popularity of long-term loans. The average new-car loan now stands at 64 months, a significant increase from the average 61 month loan in 2003. And some consumers are finding they owe more than the car is worth at the end of the loan period.
As a result of these negative trends, auto dealerships have begun to market leases. For example, lease financing for Honda brand cars has risen steadily in the last two years, to over 1/5 of all sales. And luxury car dealers such as BMW note that leasing is the preferred financing method for over 1/2 of new car sales. Industry experts expect the interest in leasing to grow.
Have you suggested marketing lease financing to your auto dealership clients?
Source: Automotive News, 03.17.2008