MINNEAPOLIS - To lease or to buy, the answer used to be pretty cut and dry when it came to owning a new car, but the increased value of a used car, along with low interest rates and rebates have changed things up a bit, according to experts.
"The margin between used cars and new cars right now is probably the smallest we've seen in a very, very long time," explained Barnett Auto Group's Michael Barnett.
Used cars continue to have a great resale value and part of what's fueling today's numbers is one huge past incentive.
"Cash for Clunkers" took thousands of used cars off the roads, he said.
Additionally, the economic crash slowed leasing sales. Fewer sales meant fewer cars headed to the used car lots when leases expired.
It's simple supply and demand. A low inventory of used cars coupled with plenty of people looking to purchase has driven up the used car price.
As a result, the car industry is now more comfortable with providing leasing deals knowing that when a lease is completed, the used car retains a lot more of its value.
"The interest rate that they charge on these leases, the money factors are point-zere-zero-something so that the customers are paying almost nothing in interest when they're leasing," said Barnett.
Low interest rates, along with rebates make leasing a more intriguing option, in some cases, than even purchasing new.
The Dodge Durango is one example where leasing and then buying may make more sense than financing the purchase outright.
According to today's numbers, if you lease a Durango for three years at $376 per month for three years and then purchase and finance the final three years at $580 per month, the final purchase price is $34,416. That's $2,000 less than a straight up purchase price of $36,558 financed over six years at $507 per month.
"And when was the last time we saw that," asked KARE 11.
"I can't think of a time," said Barnett.
As if choosing a color isn't challenging enough, add lease first, buy later financing options to the list of potentially taking care of your money.
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