SANTA MONICA, California — More new vehicles were leased in the first half of 2016 than during the first half of any other year in history, according to the latest Lease Market Report from Edmunds.com.
The data show that 2.2 million new cars, trucks and SUVs were leased in the first of this year, an increase of 13 percent over the same period in 2015, and double the number from five years ago.
Although leasing was once seen primarily as a way for consumers to move into the luxury-car segment, much of the recent growth in lease volume has come from compact cars and pickup trucks, as more shoppers opt for the convenience and low monthly payments traditionally associated with leases.
In general, monthly lease payments are 23 percent lower than monthly finance payments.
The biggest difference is in the compact-car segment (in which leases average 30 percent lower than finance payments), full-size pickup trucks (29 percent lower) and midsize cars (28 percent lower).
Another factor contributing to the growth of leasing is the acceptance of monthly payments as a way of life. Consumers now routinely assume that they'll be making payments on such items as smartphones, cable television and internet service with no expectation of a payoff date, so why should their vehicles be any different?
And leasing appeals to a growing number of consumers who have become accustomed to frequent tech upgrades — the newest mobile phone, software update or game system — and now tend to view a car more than three years old as outdated technology.
Interestingly, the Edmunds.com report shows that the younger and older groups of shoppers are the ones doing the most leasing. While the millennial generation still accounts for the most leases overall, consumers older than 75 have shown the largest increase of the past five years, a 74 percent jump since 2011.
"Millennials and seniors actually have more in common that one might think, since both experienced deep economic recessions during their formative years that helped to shape their worldviews and made them more value-oriented," said Jessica Caldwell, executive director of industry analysis for Edmunds.com. "Both millennials and seniors crave the highest-quality product for the best possible price, and considering these groups are both at a place in their lives where they likely have limited monthly cash flow, leasing can seem like the most viable option."
Finally, when it comes to gender, the Edmunds.com Lease Market Report notes that although 58 percent of all new-vehicle registrations are by men and 42 percent by women, more women than men choose to lease their vehicles: 32.3 percent compared to 29.9 percent.
Edmunds says: Shoppers looking for more information about leasing should check out the Edmunds.com Car Leasing page.