Auto Leasing Rates Back At Pre-Recession Levels

Auto leasing, once considered the realm of status-conscious drivers and people who need a new ride every three or so years, is making a comeback among U.S. consumers.

Bloomberg News, quoting data from Edmunds.com, says leases have so far accounted for nearly 28 percent of this year's new auto sales. And that rise in leasing has also helping overall U.S. auto sales figures, which are reportedly projected to have their biggest year since 2007, before the great recession.

Industry analysts, meanwhile expect auto leasing to remain an attractive option for people looking to drive a new car not for only this year, and at least partway into 2015 – thanks in part to historically-low interest rates and strong used-car prices – which means leased vehicles are holding on to their value, once they're returned.

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There's also the appeal, for some drivers, of having the latest car with the latest bells and whistles, including the new auto-friendly smartphone technology, that needs to be updated every few years.

But while leasing continues to grow in popularity, “we could see the momentum slow down next year,” cautions Alec Gutierrez, a senior analyst for Kelley Blue Book, in an email to Benzinga.

“There is some risk that used car values could begin to slip next year as additional off lease volume drives up supply at wholesale auctions,” he notes. “Additionally, there is speculation that the Fed could raise interest rates should unemployment continue to trend down as the economy improves.”<

For the time being, however, leasing continues to be a popular trend – with models from Honda HMC, Ford F and Toyota TM currently leading the pack of the most desired leased cars.

According to KBB, Honda Civics made up more than 38 percent of new cars leased during the first four months of 2014, followed by Honda's CR-V (31.1 percent) and its Accord (27.2 percent).

The Ford Escape SUV also proved popular with people preferring leased vehicles, along with Toyota's Camry.