Are Some Consumers Regretting Vehicle Leases?

Officials from LeaseTrader.com and Edmunds.com believe greater amounts of consumers are having significant remorse about leasing a new vehicle. Why? The sites contend these individuals failed to research the effect their new unit would have on insurance premiums.

Edmunds.com determined that leases currently are making up more than 20 percent of all new-vehicle transactions for the first time in more than a decade. And the site thinks many first-time leasers are making rookie mistakes.

It’s what prompted LeaseTrader.com to notice a rise in the number of people using their site to escape from a lease. Site officials determined consumers indicating the impact on their auto insurance premium are accounting for 4.5 percent of transactions this year. They said that’s up from 2 percent in previous years.

LeaseTrader.com says lease drivers facing higher insurance premiums are escaping vehicles like the BMW 3 Series, Mercedes C Class, Infiniti G37 and Lexus IS.

“People are more focused on the bottom line price, rather than the complete picture of the lease,” explained Sergio Stiberman, chief executive officer and founder of LeaseTrader.com.

“In a struggling economy people tend to be fixated on the car’s monthly payment and nothing else,” Stiberman continued.

“When people shop for a new-car lease the majority tend to only look at the payment. Many people today fail to factor in their new auto insurance premium and coverage requirements,” he went on to say. “This is especially prevalent with people who may be new to leasing. These drivers fail to realize a lease requires a certain amount of insurance that’s often higher than their previous coverage.”

Carroll Lachnit, features editor for car research at Edmunds.com, echoed Stiberman’s points and speculated where consumers go wrong in the showroom.

“Some people go into a dealership with the intention of financing a car with a certain monthly payment, but switch to a lease program at the last minute because they can get a better car for the same money,” Lachnit surmised.

“What some consumers forget is that the cost of insurance is based on the value of the car among other factors. If they’re only counting the monthly lease payment, the higher insurance cost could bust a down-to-the-penny budget,” Lachnit concluded.