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Leasing Becomes More Popular With Multiple Age Groups

Aug 17, 2016 recently released its Lease Market Report, which found that both millennials and seniors are beginning to question the value of car ownership. The first six months of 2016 saw a record number of new vehicles leased. In just the last five years, total lease volume has doubled.

More than 34% of millennials lease vehicles. Shoppers over the age of 75 aren’t far behind, with 32% of that age group leasing vehicles, a huge jump from 19% that leased vehicles in 2011.

Edmunds says that both millennials and seniors look for the highest-quality product for the best possible price. Leasing presents itself as a viable option because lease payments are 23% lower on average than monthly finance payments. The biggest difference between monthly lease and finance payments can be found with compact cars (30%), full-size pickup trucks (29%) and midsize cars (28%).

Due to the shift in consumer behavior, automakers are challenged to offer attractive lease deals, while protecting residual values against a flood of used cars hitting the market at once. A trend toward lower-allotted mileage of leased vehicles helps ensure vehicles are returned in better condition.

Edmunds says the spike in leases may present a challenge for manufacturers and dealers in the future, but they don’t see the trend slowing anytime soon.