More Car Buyers Are Leasing and That’s Good For You

The percentage of Americans leasing cars has boomed to 20% over the past few years. Rough economic times, better leasing offers, and car manufacturers creating better vehicles has helped spur the growing number of consumers leasing instead of buying new. Some car dealers may prefer that most consumers would much rather buy, and that leaves the opportunity for those who buy certified pre-owned vehicles with an endless array of quality cars at reasonable prices. As with most trends in the economy, there is always an opportunity for someone to walk away with a great deal, and right now it’s time to take advantage of the leasing craze that is growing across the country.

Tesla just unveiled a leasing program for their Model S, which will now make monthly payments cheaper for the consumer.

From the Wall Street Journal

With sales of its electric sedan declining in its home market, Tesla Motors Inc. this week launched U.S. incentives that cut its monthly lease price and aim to convince potential customers that buying the car is a safe financial bet.

Tesla Chief Executive Elon Musk said the Silicon Valley car maker is joining with U.S. Bank to cut monthly lease payments by as much as 25%. In a blog post on Saturday, he credited the bank’s lower cost of capital for the lease-rate cut. He also unveiled a “happiness guarantee,” promising to take back cars within the first 90 days of ownership “if you don’t like your car for any reason.” The return policy doesn’t allow a buyer to swap for another vehicle.

While some would say this is because of declining sales, this is happening across the board for most auto manufacturers. Leasing is becoming the new normal, especially with the uncertainty of the long term health of the economy. You might ask, “So where are the opportunities?”. Here are three cars that are under $25,000 and are from luxury brands that can be found on dealership lots. Best of all, they’re certified pre-owned and the mileage is below 31,000.

1) Volkswagen GTI/Wolfsburg Edition

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It’s not too uncommon to find Volkswagen Golfs, but to find multiple GTIs spanning from the years of 2011-2013 is very surprising. Even better for the consumer, there are a few Wolfsburg edition GTIs on the market that are under $25,000, one of which has only 5,000 miles on it. These are gems, and with the turbocharged engine that supplies 200 hp, you get performance and cargo room which is always a plus.

2) 2011 Lexus IS 250

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To see these under $25,000 with close to 20,000 miles is certainly an eye opener. A local Lexus dealer outside of Boston has a few of these, and even though they are the base models, they’re still fully equipped and in great condition. Navigation system and backup assist make you feel like you’re getting away with more than what you paid for, but these are the types of deals that are out there. Seeing a Lexus IS on the market in great condition and not overly driven, it makes you question why there are certified pre-owned Toyota Camry’s and Chevrolet Malibu’s in the same price range.

3) 2011 BMW 3 Series

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Just as the Lexus IS, the model year may be the only reason why these luxury cars have depreciated in value. There are BMW 328i X-drives that only have 25,000 – 30,000 miles on them and priced under or at $25,000. Once again, this is a luxury sedan that will make your mouth water because to see a BMW in unbelievable condition at that price was unheard of a few years ago.

When seeing offers and deals like this, it really makes you consider going the certified pre-owned route. The automotive market is evolving, and unlike 10-15 years ago, going used isn’t a bad thing, especially when you have three solid vehicles at reasonable prices. This is only the beginning though. Seeing that there is no reason to believe the leasing trend is going to slow down, there will be more opportunities down the road. Who knows what will be on the market a year or two from now, and maybe there will be better offers than there are right now.

Using CarFax Alone Isn’t Going to Guarantee Finding a Quality Car

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Janitors / Foter / Creative Commons Attribution 2.0 Generic (CC BY 2.0)

CarFax is a great tool for the 21st Century car buyer who is looking for a Certified Pre-owned or used vehicle that is still in good condition. However, there is still no guarantee that you’ll find the perfect car that has years and thousands of miles left in it’s lifetime. There are multiple factors that come into play, such as the previous owner’s driving habits, the car’s seasonal wear and tear, and more importantly where the vehicle was manufactured. The country(s) in which the car was manufactured can be the difference between buying a quality vehicle and a lemon.

To dig deeper into this, think about your favorite automotive brand, or even the current car you own and drive on a daily basis. Where was the car manufactured? Shockingly, some of your favorite everyday purpose cars may not be built where you think they are, even if it has a reputation of being an American, German, or Japanese car.

Volvo has just announced that their new S60L which is manufactured in China will be sold in the United States. With this story being only a few weeks old, it’s already stirred up controversy as the company’s reputation of being a safe, reliable brand may be thrown to the gutter if Volvo plans to go through with selling a Chinese Volvo in the states, which they have every intention of doing.

Volvo’s are known to last a very long time, in fact people joke saying that they’ll outlive the owner if kept in good condition. Who knows how long the 2015 S60L will last, and there will be many questions raised by consumers when you find it in the pre-owned list on your local Volvo dealer’s website.

Another popular car brand is Volkswagen, and it might surprise some that a majority of their vehicles that are sold in the US aren’t made in Germany. Yes, the same Volkswagen who owns Audi, Porsche, and Bugatti doesn’t manufacturer all their cars in Wolfsburg. The VW Beetle, Jetta, Golf, and soon the Golf GTI are or will be made in Mexico. It wasn’t until 2005, when VW changed the appearance of the Jetta, that they started assembly and production in Mexico. Whether this changes the quality of the vehicle itself, that is still to be determined, but the perception customers have of the car is certainly different.

To make sure you’re getting a top notch used car, do extensive research on where the vehicle was manufactured. Not only is the assembly of the car different, but you’ll find that the electrical components and interiors will be substantially different. Road noise or lack thereof will be noticeable, and even the suspension and how it takes bumps on the road could determine where it really came from.

The badge on the front of the car may say it’s from Germany, Sweden, or America, but there is the possibility that it’s originally from some factory in Mexico, or China if you intend on buying the new Volvo S60L. We have no power to improve the driving habits of drivers so we get a used car in great condition, but we can research and make sure we’re getting a car that was built in a factory that has a reputation of producing quality and long-lasting vehicles.