Affordable Car Leases Make a Comeback

By Dan Strumpf, AP Auto Writer

NEW YORK (AP) — At long last, it's a good time to lease a car again.

That's because a number of factors have been working in consumers' favor to make the leasing market affordable and accessible for the first time since the financial crisis began in late 2008.

Just take a look at the deals. At Volkswagen, shoppers can get a three-year lease on a new Jetta for $199 a month with $2,499 at signing. Chevrolet is offering 39-month leases on the Malibu for $199 a month and $2,738 at signing. And Honda is touting a particularly aggressive promotion, offering leases across nearly its entire lineup for nothing down, nothing due at signing, no security deposit and no payment for the first month.

"That's unheard of in leasing," said John Sternal, spokesman for the lease swapping Web site "There are carmakers out there offering some great deals."

Those are just a sample of the cheap leases on the market. Several factors are coming together to make leasing easier again.

First of all, the financial sector and the broader economy are slowly starting to recover. And when banks start making money again, they become more willing to lend. That's contributing to a general easing in the market for credit, including leases.

Second, residual values are climbing. Residual values — or a new car's estimated value as a used car — are important because lease payments are determined in large part by what a car will be worth when the lease is up. If its value holds up well, the lease becomes cheaper.

Third, automakers are offering discounts. Car manufacturers are always spending money on incentive programs like cash-back offers or low-interest loans. But in recent months, more of the focus has been on inexpensive leases.

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