New Car Leases Beat Buying A Used Car, Says Major Car DealerDecember 19, 2017
Adam Lee is Chairman of Lee Auto Malls in Maine, which is a large local dealer in the Pine Tree State. Lee Auto Malls consists of seven dealerships that sell eight different brands, plus ten used car only stores. In a recent video interview with Automotive News, Adam Lee shared some insights into the current state of the car business.
Lee stated that his used vehicle sales were down dramatically because of the huge incentives on new cars. He commented that these vehicle incentives, ranging from $4,000 to $6,000 per vehicle, are very common in today’s market. He also mentioned the great new car lease deals that are now available.
This Is What It Takes To Sell New Cars Today
This is the current state of the automotive marketplace. Manufacturers have huge inventories on the dealer’s lots, with plenty more coming off the production lines of the world’s auto factories. The carmakers want to maintain the best possible level of new car sales. More cash on the hood, along with subsidized lease deals, are the result.
When New Cars Are Such Deals, Why Buy A Used Car?
This aggressive new car marketing activity from the manufacturers has had a profound effect on the used car market. New cars are suddenly affordable to a large segment of the population, including those who were previously limited to something from the used vehicle lot. Consumers can now drive a brand new car, with a full warranty, for less than the payment on a used car.
As a result, many people who would have purchased a used car will now lease a new one – and end up saving money. They save on the monthly payment, and they also save because there will no unwelcome surprises from things that break after the warranty runs out. A used car simply can’t compete with that.
The used car market will need to adjust to this new reality. Used car prices may have to drop to the point where they are significantly more affordable than new cars with major incentives built in. Stay tuned!