To Lease or Not to Lease?
Nearly one-third of car sales are now leases
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Teguh Jati Prasetyo / shutterstock.com
Tony Bellomio doesn’t expect his employees at The Maids of Tallahassee to buy a new car every few years, but he can ensure that they drive one.
“We lease,” said Bellomio, co-owner of the cleaning service with his wife, Shelby. “Our maids are cleaning houses in nice neighborhoods, and a new car promotes a better opinion of our company.”
Bellomio leases five vehicles for his business — four Honda CRVs and one Honda Fit — as well as two vehicles for personal use.
“It’s more cost-effective,” said Bellomio, also a salesman for Acura for 25 years. “We get the safest, newest cars every few years. It makes sense.”
While leasing is gaining momentum, not all drivers are on board.
At the other end of the financing spectrum are consumers such as Tallahassee resident Gail Brayman, who finds buying more economical — in the long run.
Brayman bought her 2002 Nissan Altima in November 2001, and it’s still running. In 15 years, she has spent about $8,000 on the car, which originally cost $27,500. It now has 99,400 miles. Brayman bought it outright, with the help of a home equity loan, which she quickly paid off.
“I feel more secure having my own car,” Brayman said. “I don’t have to worry about running up mileage, and I don’t have to worry if I get any dents or dings. I didn’t want to pay money to keep up a car that I’m going to have to turn over to the car dealership.”
Brayman keeps her emerald mist-colored Altima spotless, so it’s still “almost perfect.”
Whether you like to lease like Bellomio or buy like Brayman, the world of auto financing is, well, complicated.
“Leasing is probably the most misunderstood way to finance a vehicle, and because it’s misunderstood, I think it scares a lot of people away from it,” said Will Benedicks, director of finance for The Proctor Dealerships in Tallahassee. “We try to help educate consumers, because the more educated the consumer, the better the decision they can actually make.”
More consumers, from college grads to retirees, are indeed deciding that leasing is a viable alternative to paying cash or getting a traditional car loan.
“There are a lot of people who enjoy being in a new car every few years,” said Greg Clark, general manager of Werner Hyundai in Tallahassee.
Leasing now accounts for nearly one-third of vehicle sales throughout the country. According to the latest Lease Market Report from the car-buying platform Edmunds.com, more new vehicles were leased in the first half of 2016 than during the first half of any other year in history. The figures show that 2.2 million new cars, trucks and SUVs were leased in the first part of this year, an increase of 13 percent over the same period in 2015, and double the number from five years ago.
“Leasing is very popular at Capital Eurocars,” said Crawford Atkins, vice president and general manager of Capital Eurocars Group in Tallahassee. “Approximately 40 percent of our new vehicle sales are leased, and that number is growing. … I am a lease customer, myself. I have been in the automotive business for over 31 years and I lease my personal cars. For me, there is not a smarter way to pay for a car.”