Why has leasing become increasingly popular over the past 15 to 20  years?

• In the mid 1980s, the government imposed "Luxury Tax Limitations" on the write-off of business use vehicles.  The tax laws began to favor leasing in many situations.
   
• In the late 1980s, the government eliminated the tax deduction for interest on vehicle loans.  This increased the cost of ownership.
   
• Savvy consumers began to realize that there were better uses of their cash than investing in a depreciating asset such as a car.
   
• A lease payment is typically smaller than the payment for the purchase of the same vehicle. In a lease you pay only for the value of the vehicle used during the lease. Under a purchase agreement you would pay for the entire vehicle, regardless of the amount of use or final value.
   
• Businesses and individuals have been attracted to leasing because no cash investment is required. A lease usually asks for a small refundable security deposit and the first month's lease payment, with no down payment. Licensing and registration are simplified and, as the vehicle is "turned in" at the end of the lease, there is easy disposal of the old vehicle.
   
•  As the cost of vehicles has continued to increase, people oftentimes couldn't afford the loan payment on the vehicle of their choice, and turned to leasing with its lower payments.  However, we always discourage customers from acquiring more car than they can afford.

Part 2: Who Should Lease