Wheel Deal: December
From December 2005
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Selling the cost of monthly payments is done less in the Auburn area than in Sacramento. “That kind of negotiation goes on more with median-income people,” says Ponzo. “People up here can buy what they want, whenever they want, however they want.”
Banks Back Off
Many banks still have burn marks from 1990s losses and won’t touch auto leasing. Five Sacramento Metro Market community banks surveyed by Prosper don’t offer auto-lease financing. Even with the comeback in used-car values, some of the major banks control all leases from a central finance department, with branch offices out of the picture. Wells Fargo Bank, for example, indirectly leases to consumers by providing financing through auto dealerships.
Auto manufacturers are pushing leases because they need previously leased vehicles to supply their certified used-car business. “Certified used cars are profitable for the car companies,” says Art Spinella, president of CNW Marketing Research, and they’re popular with consumers.
Dealers typically have to pay a fee to the manufacturer for a used car that carries the certified warranty label, a motor industry form of the Good Housekeeping Seal of Approval. Dealers do the certification, but the certified car is open to outside inspection if the manufacturer wants verification.
“Dealers have no choice but to go to the level the manufacturers want them to go to,” Spinella says. “If you buy a used car that is manufacturer certified, you can take it into any of the manufacturer’s dealers anywhere in the country.” The manufacturer-certified warranty is usually three years, 36,000 miles and covers “just about anything.”
The average premium on a manufacturer-certified used car for sale or lease is about $1,200, “more for more expensive cars. The national average is about $900,” Spinella says.
Car companies are always looking for ways to pump sales incentives, “and nothing gets people to buy a car quicker than a low monthly payment. Leasing offers a lower monthly payment than financing a car. For the same period of time, it’s like half. It usually takes less money to get into the car too,” he notes.
Disputing Ponzo at Maita in Auburn, Spinella argues that lease payments are about the same as financed car payments “only if you’re comparing a five-year purchase with a three-year lease.”
Banks Back Off
Many banks still have burn marks from 1990s losses and won’t touch auto leasing. Five Sacramento Metro Market community banks surveyed by Prosper don’t offer auto-lease financing. Even with the comeback in used-car values, some of the major banks control all leases from a central finance department, with branch offices out of the picture. Wells Fargo Bank, for example, indirectly leases to consumers by providing financing through auto dealerships.
Auto manufacturers are pushing leases because they need previously leased vehicles to supply their certified used-car business. “Certified used cars are profitable for the car companies,” says Art Spinella, president of CNW Marketing Research, and they’re popular with consumers.
Dealers typically have to pay a fee to the manufacturer for a used car that carries the certified warranty label, a motor industry form of the Good Housekeeping Seal of Approval. Dealers do the certification, but the certified car is open to outside inspection if the manufacturer wants verification.
“Dealers have no choice but to go to the level the manufacturers want them to go to,” Spinella says. “If you buy a used car that is manufacturer certified, you can take it into any of the manufacturer’s dealers anywhere in the country.” The manufacturer-certified warranty is usually three years, 36,000 miles and covers “just about anything.”
The average premium on a manufacturer-certified used car for sale or lease is about $1,200, “more for more expensive cars. The national average is about $900,” Spinella says.
Car companies are always looking for ways to pump sales incentives, “and nothing gets people to buy a car quicker than a low monthly payment. Leasing offers a lower monthly payment than financing a car. For the same period of time, it’s like half. It usually takes less money to get into the car too,” he notes.
Disputing Ponzo at Maita in Auburn, Spinella argues that lease payments are about the same as financed car payments “only if you’re comparing a five-year purchase with a three-year lease.”
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