The New Rules Of Car Buying Rule 3

Written by Terry J. Schultz    Monday, 09 February 2009

CHEAP LEASES ARE DISAPPEARING… The ridiculously low-cost leases of the past decade let Americans drive far more expensive vehicles than they could have afforded to buy. Those days are over. Lease payments are closing in on loan payments for the same model, wiping out leasing's biggest advantage. What's killing the market is that the cars coming off of leases are worth far less than car makers had originally estimated (your lease payments cover expected depreciation plus interest). To stem their losses, Chrysler Financial and GMAC have cut back or even suspended leasing programs. At the banks and car makers that still offer leases, including Toyota and Honda, you'll need good credit to qualify and your payments will likely be significantly higher than in recent years, says James Bell, editor and publisher of IntelliChoice.com, a car information website. Luxury brands such as BMW and Audi are the exception. Because so much of their business hinges on leasing, luxury-car makers haven't raised prices as much and probably won't, says Richard Apicella, an auto finance industry consultant at Benchmark Consulting International.

Last Updated ( Monday, 09 February 2009 )