Wheel Deal: December
From December 2005
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California: Leasing’s Leader
This year, 20.5 percent of the 13.6 million cars and trucks delivered were leased, estimates CNW, with California’s share expected to come in at 27.1 percent of the leasing total. The auto-market research firm is projecting 25.6 percent of 14.1 million new cars and trucks delivered nationally will be leased in 2007. About 28.2 percent of those will be leased in California.
Trent Fong, general manager of Clinton Leasing and Sales in Sacramento, says his leasing business was up about 20 percent through 2005’s first nine months. The firm, which leases 200 to 250 vehicles in a rolling 12-month cycle, is forecasting a 20 percent to 30 percent increase in 2006.
As of mid-October, high gas prices were a minor factor in leasing decisions. Rather, Fong attributes the pickup in leasing mainly to the high price of cars and trucks, new and used. “Cars are real expensive and the only way some people can afford them is by leasing them,” he says.
The cost and number of monthly payments on a lease versus financing a purchase remains a key issue for consumers. Few choose, or can afford, the once-typical three-year lease or purchase package. At the Clinton firm, for example, most lease contracts stretch to five or six years.
SUVs Still Popular
Fong’s customers include “a lot of young professionals, men and women.” The most popular nameplates leased are out of General Motors and Mercedes. Through the first three quarters of 2005, sport utility vehicles still were popular, despite their low fuel economy. “People who can afford SUVs can afford higher gas prices,” he says.
Despite rising fuel costs, autos with hybrid engines haven’t been popular choices. “They’re a bad lease car because nobody knows what they’re going to be worth in residual value, even after six months,” says Fong. “Nobody knows what it’s going to take to keep them on the road.” Also mostly a mystery is the cost of replacing a hybrid engine.
Continued...
This year, 20.5 percent of the 13.6 million cars and trucks delivered were leased, estimates CNW, with California’s share expected to come in at 27.1 percent of the leasing total. The auto-market research firm is projecting 25.6 percent of 14.1 million new cars and trucks delivered nationally will be leased in 2007. About 28.2 percent of those will be leased in California.
Trent Fong, general manager of Clinton Leasing and Sales in Sacramento, says his leasing business was up about 20 percent through 2005’s first nine months. The firm, which leases 200 to 250 vehicles in a rolling 12-month cycle, is forecasting a 20 percent to 30 percent increase in 2006.
As of mid-October, high gas prices were a minor factor in leasing decisions. Rather, Fong attributes the pickup in leasing mainly to the high price of cars and trucks, new and used. “Cars are real expensive and the only way some people can afford them is by leasing them,” he says.
The cost and number of monthly payments on a lease versus financing a purchase remains a key issue for consumers. Few choose, or can afford, the once-typical three-year lease or purchase package. At the Clinton firm, for example, most lease contracts stretch to five or six years.
SUVs Still Popular
Fong’s customers include “a lot of young professionals, men and women.” The most popular nameplates leased are out of General Motors and Mercedes. Through the first three quarters of 2005, sport utility vehicles still were popular, despite their low fuel economy. “People who can afford SUVs can afford higher gas prices,” he says.
Despite rising fuel costs, autos with hybrid engines haven’t been popular choices. “They’re a bad lease car because nobody knows what they’re going to be worth in residual value, even after six months,” says Fong. “Nobody knows what it’s going to take to keep them on the road.” Also mostly a mystery is the cost of replacing a hybrid engine.
Continued...
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