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AUTO LEASING ON THE RISE, SAYS NADA

 WASHINGTON, July 27 /PRNewswire/ -- Auto leasing, once only available to affluent consumers seeking luxury cars, has more than doubled in the last 10 years and now includes all types of vehicles and consumers in all income groups, according to the National Automobile Dealers Association (NADA).
 NADA said leasing grew 20 percent in 1992, to 1.7 million new vehicles, or 22 percent of the retail new-car market (which excludes commercial and government fleet purchases). Leases represented about half of all retail transactions in the luxury-car market last year, and it is growing in all market segments, including 9 percent of the light truck market in 1992.
 "With the price of new and used vehicles rising continually, leasing is a win situation for everybody," said NADA President Jim Lust. "Customers can lower their monthly car payments and shorten their trade cycles, dealers are assured customers will come back to the dealership at the end of the lease, and manufacturers can build more cars."
 Lust credited the boom in leasing to attractive new programs offered by automakers and dealers that have made new vehicles more affordable to more people. "Monthly lease payments are lower than car loans because they are based on the difference between the price of the new vehicle and its expected residual (trade-in) value at the end of the lease, not on the entire purchase price," he explained. "In other words, you only pay for what you use."
 For the same monthly payment as a loan, Lust added, "You can lease a more expensive car for a shorter period of time, and you can take possession quickly and easily."
 To help sell vehicles in a tough market, automakers have made leasing more attractive by lowering interest rates on leases, offering generous residual values and shortening the length of leases. "For example," said Lust, "by offering low lease rates and requiring a modest down payment, manufacturers have been able to reduce the length of the lease without increasing the monthly payment."
 The obvious disadvantage to leasing is that you do not own the vehicle at the end of your lease to use as a trade-in on your next vehicle. There are also financial penalties for getting out of a lease early and for excessive wear and tear and mileage (usually over 15,000 miles per year).
 "Only you can decide whether to buy or lease," said Lust. His advice to consumers is: "Once you have decided on a specific model, the dealership salesperson can help you make this decision by showing you on paper the financial differences between leasing and buying the same vehicle."
 The National Automobile Dealers Association represents 19,000 franchised new-car and -truck dealers holding 35,000 separate franchises, domestic and import.
 -0- 7/27/93
 /CONTACT: Ted Orme of the National Automobile Dealers Association, 703-827-7407, or fax, 703-821-7075/


CO: National Automobile Dealers Association ST: District of Columbia IN: AUT SU:

LV -- NYFFNS8 -- 5996 07/27/93 06:53 EDT
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Publication:PR Newswire
Date:Jul 27, 1993
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