Edmunds.com 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.