SALT LAKE CITY — Leasing a car for a period of two or three years is at an all-time high. Credit agency Experian says more than 28 percent of all vehicles financed are now leased.
That's good news for automakers. They want to reverse the recent trend of consumers holding on to cars for a decade or longer.
But is it always good news for the consumer?
“It can be disastrous if your intention is to own a car outright and have it longer than a two- to three-year period,” said Shane Stewart, a certified financial planner for Deseret Mutual.
Stewart said leases often look cheaper because of a monthly payment lower than on a loan to buy the car. But he said they're rarely a good deal.
“You need to think carefully about the fees and the expenses that come along with leasing,” he said.
Car website Edmunds.com estimates on a car selling somewhere in the mid-$20,000 range, leasing will cost about $6,000 more than buying a car new. And you still won't own the thing when the lease is up.
The dealership wants to get you in another car.
“You might get caught in the lease loop as they call it, where you are always leasing because you can never get ahead of the curve like you could if you were buying,” he said.
However, some people do benefit from leasing, Stewart said. For example, people who don't want to hassle with much maintenance, as well as those who love the latest innovations.
“The technology is changing so quickly. In something like a hybrid, especially an electric car, where the technology is new, leasing might be a good idea because you want a different technology two or three years down the road,” Stewart explained.
Auto experts say the leasing trend could result in a flood of used cars at dealerships starting next year. That means used car buyers could score big deals when vehicles go off lease, since there may be so many of them.