Insights

Leasing Becomes More Popular As Car Tech Evolves


car_leasing

A recent report by Edmunds stated that the number of car leases has exploded in recent years, from 1.4 million vehicles in 2009 to 4.3 million vehicles in 2016.  This year, Lexus said 65 percent of its car sales have been leases, up from 61 percent a year earlier.  So why is leasing becoming so popular?

Experts have speculated that because car technology is evolving so fast, consumers are beginning to treat car buying the same way they treat buying a phone. Most people don’t keep their phone until it dies, they often will trade it in every couple of years for the newest model. This is because phone technology regularly becomes obsolete, and consumers feel pressure to stay up to date.

In the auto-industry, driver-assist features such as automated parking, lane-departure prevention, blind-spot monitoring and advanced cruise control, which analyzes the speed of nearby cars and adjusts accordingly, have made their way into low-priced and luxury cars. Forty-nine automobile brands — including Kia, Honda and Ferrari — now feature Apple CarPlay, which connects an iPhone to the car’s built-in display, enabling a driver to make calls, send texts and listen to music while focusing on the road. If the phone industry is any indication, the arrival of such sophisticated technology to lower priced cars may very well be the catalyst for the leasing boom.

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