The popularity of leasing a car has exploded in recent years, with individual consumers accounting for the bulk of the increase. Leasing has grown more than tenfold in less than a decade, and now accounts for more than 35% of the 17 million-plus vehicles sold in the United States.
The ever increasing cost of new vehicles combined with a decline in the disposable savings of Americans and changes to the tax laws are the main causes.
In 1987, more than 70% of disposable savings were available for the purchase of consumer goods. By 1993 that figure had declined to less than 40%. This year, the percentage continues its downward slide.
Additionally, the many tax deductions that favored purchasing over leasing were eliminated. Since those tax laws were changed, leasing has enjoyed a steady increase every year for the last ten years.