There’s a new trend among young car shoppers, and it’s allowing young professionals to get behind the wheel of luxury cars: the new car lease. New car leases have skyrocketed 41.7% in the last five years, and the increase is largely driven by young car shoppers.
Thanks to vehicle leases, millennials (born 1981 to 1997) are able to afford luxury vehicles long before they otherwise could. Edmunds.com has found that 28.9% of all millennials who bought a new car so far this year financed the purchase by leasing.
There are a number of reasons millennials are choosing to lease instead of buy their vehicles. Maybe most obvious, the monthly payment for a lease is less than the monthly payment associated with a car purchase. Since the lessee only pays payments on the car’s estimated depreciation over the lease period (instead of the entire value of the car), those payments are more manageable. In addition, smaller down payments are required (if any at all).
Millennials are also more open to having a consistent payment, with no expectations of paying off a vehicle and keeping it for the long term. Since their circumstances are quickly changing, they don’t necessarily want to be tied to their car for more than a few years. The prospect of marriage, kids, pets and new hobbies could mean a different car will be necessary in the near future.
If you’re trying to decide whether to lease or buy your next vehicle, check out this article on Buying vs. Leasing a New Car, and stop by Union Park BMW today!