Office Hours

Auto and truck leasing are clearly tied to higher gas prices

Today's Spokesman Review story on the rise in gas prices indicates people are concerned enough to cut down on travel trips or use less expensive means of transport.

One follow-up received here came from, a site to help companies finding or leasing vehicles.

Their comment on the impact of higher prices has two points to make: 

--Based off 2008 modeling, believes drivers won't take specific action (reduced gas consumption, exiting lease contracts) until gas reaches $4 per gallon.

--During the summer of 2008, 78 per of all SUV/truck transfers were due to high gas prices (currently just 16 percent of SUV/truck transfers are because of gas prices).
The story we ran had comments confirming the first point.
And in a conversation yesterday with sales people with area auto dealers, the consensus was that leasing is up among vehicle customers. And gas prices do play a part.
The point, not included in today's article, is that many drivers will lease as a hedge against future gas prices. When taking out a lease instead of a three- or four-year vehicle loan, the leasor stands to come out the deal without holding a vehicle of diminished value.
In effect the lease lets the driver use the car or truck for two or three years, or sooner, if the costs of fuel keep rising to the point that a more economical choice is needed.

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Tom Sowa
Tom Sowa covers technology, retail and economic development and writes the Office Hours blog.




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