Unexpected Car Ownership Costs Cause People to Escape Leases at Remarkable Rate

Unexpected Car Ownership Costs Cause People to Escape Leases at Remarkable Rate

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First-Time Leasers' Remorse on the Rise

Miami — November 9, 2010 — Leases makes up more than 20 percent of all new car purchases for the first time in more than a decade, according to Edmunds.com, and many first-time leasers are making rookie mistakes.

While the Internet has helped many drivers become more diligent in all facets of the car-shopping process, many neglect to check the ownership costs on their desired vehicles. Car leasing website LeaseTrader.com says more people are experiencing remorse today because they fail to research the effect their new car will have on insurance premiums.

LeaseTrader.com says the number of people escaping a lease because they didn't research the new car's impact on their auto insurance premium will account for 4.5 percent of transactions this year, up from 2 percent in previous years.

Company executives believe the main reason is that people are more focused on the bottom line price, rather than the complete picture of the lease. "In a struggling economy people tend to be fixated on the car's monthly payment and nothing else," said Sergio Stiberman, CEO and founder of LeaseTrader.com.

When people shop for a new car lease the majority tend to only look at the payment. Many people today fail to factor in their new auto insurance premium and coverage requirements. This is especially prevalent with people who may be new to leasing. These drivers fail to realize a lease requires a certain amount of insurance that's often higher than their previous coverage.

"Some people go into a dealership with the intention of financing a car with a certain monthly payment, but switch to a lease program at the last minute because they can get a better car for the same money," wrote Carroll Lachnit, features editor for car research website Edmunds.com at http://blogs.edmunds.com/strategies/2010/10/car-leasers-stepping-up-to-nicer-cars-sometimes-forget-the-higher-insurance-cost.html. "What some consumers forget is that the cost of insurance is based on the value of the car (among other factors). If they're only counting the monthly lease payment, the higher insurance cost could bust a down-to-the-penny budget."

Edmunds.com offers a free "True Cost to Own" calculator at http://www.edmunds.com/tco.html so that consumers can compare expected costs of insurance, maintenance, fuel and other expenses before deciding which car to buy or lease.

LeaseTrader.com works with people who can no longer afford their vehicle payment by transferring the contract over to another individual. The company says lease drivers facing higher insurance premiums are escaping vehicles like the BMW 3 Series, Mercedes C Class, Infiniti G37 and Lexus IS.

About Edmunds (http://www.edmunds.com/help/about/index.html)

Edmunds publishes Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive information, launched in 1995 as the first automotive information Web site and hosts the most established automotive community online. Its mobile site, accessible from any smartphone at www.edmunds.com, makes car pricing and other research tools available for car shoppers at dealerships and otherwise on the go. InsideLine.com is the most-read automotive enthusiast Web site. Its mobile site, accessible from any smartphone at www.insideline.com, features the wireless Web's highest quality car photos and videos. AutoObserver.com provides insightful automotive industry commentary and analysis. Edmunds is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow Edmunds.com on Twitter@edmunds and fan Edmunds.com on Facebook at http://www.facebook.com/edmunds.

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