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Saturday, July 08, 2017

Auto OEMs And Auction Houses Are Colluding To Prop Up Used Car Prices; It Won't Work

We've written frequently about the pending collapse in used car prices that will inevitably be brought on by a surge in leases over the past 5 years. With wages stagnant and car prices rising, the only way Americans could 'afford' those brand new BMWs and Mercedes was to lease them.

Of course, the math behind how we got here is fairly obvious. The majority of Americans buy cars based on one factor: monthly payment. And when it comes to managing your monthly payment to the lowest level possible, leasing is the way to go. Per the Bank Ratecalculator below, buying a $30,000 car comes with a monthly payment of around $600 while leasing the same vehicle might only cost $420 per month.

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2 comments:

Anonymous said...

The mileage usage restrictions with leasing is prohibitive in my opinion.
Leasing has never been attractive to me for that very reason.

Anonymous said...

Never understood why you have to pay 6% sales tax on a car you're renting for 3 years.