Retail Auto Leasing Drops Due to Zero-Percent Interest Financing
The number of people leasing vehicles from automakers has declined dramatically over the last four years, a byproduct of zero percent financing and cash incentives to get people to buy new cars, according to an article in the Detroit News.According to a study of state motor vehicle registrations nationwide by R.L. Polk Co., an automotive consulting firm in Southfield, Mich., about 5.2 percent of new American-made vehicles were leased in Sept. 2003, the latest month for which data is available, down from 21.8 percent in September 1999."One of the most fundamental reasons (for the decline) is zero percent financing," Lonnie Miller, director of solutions at Polk, told The Detroit News. Asian automakers, which include Japan’s Toyota Motor Corp. and Honda Motor Co., also have experienced major declines in leasing, from 21.1 percent of all buyers in 1999 to 9.5 percent in 2003.The fall-off in leasing has been less dramatic for European brands, including luxury automakers such as Land Rover, Jaguar, Volvo, and Mercedes. Leases accounted for 34.1 percent of European brand sales in September 2003, compared with 37.9 percent in the same month in 1999.