SANTA MONICA, Calif. – More and more people seem to be questioning the value of car ownership, and millennials and seniors appear to be at the forefront of this trend.
More new vehicles were leased in the first half of 2016 than during the first half of any other year, according to the latest Lease Market Report from Edmunds.com. And lease volume has doubled over the past five years.
The millennial generation has a higher rate of lease penetration than any other generation (34.2 percent), but the strongest growth has come from shoppers over age 75. During the first six months of 2016, more than 32 percent of cars sold to this age group were leased — a growth rate of 74 percent compared to five years ago when lease penetration this group was just 19 percent.
“Millennials and seniors actually have more in common that one might think, since both experienced deep economic recessions during their formative years that helped to shape their worldviews and made them more value-oriented,” Jessica Caldwell, Edmunds’ executive director of industry analysis, said in a news release.
“Both millennials and seniors crave the highest-quality product for the best possible price, and considering these groups are both at a place in their lives where they likely have limited monthly cash flow, leasing can seem like the most viable option,” she said.
Monthly lease payments are 23 percent lower on average than monthly financing payments. The biggest difference between monthly lease and financing payments can be found with compact cars (30 percent), full-size pickup trucks (29 percent) and midsize cars (28 percent).
While the majority of vehicles leased continue to be in the luxury segment, the most significant growth has been seen in large vehicles, with compact trucks (214 percent), large trucks (142 percent) and large crossover SUVs (96 percent) leading the way.
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