With rising interest rates potentially coming, do you think leasing will still be viable?

Just wondering, I know there are a bunch of proposed rate hikes. I’m sure there will still be good deals but thinking that it might make it a little less margin to work with…

The prime rate/MF in 2006 was approximately double what it is now, you’d be looking at about an extra $100-$150/month on a $50k cap cost vehicle.

This is a very interest point, I think manufactures will step up the incentives to compensate for it. I don’t expect a huge jump, but there will be a slight one. It’s one of the reason I am trying to find a deal and see if i can get out before everything goes up for Q2

Short term, it will make leasing more expensive. But i would not worry about that long term. The economy is cyclical. Post WW2 we have never gone more than 10 years without a recession. When that comes, interest rates will fall.

I doubt those rates will rise how e everyone expects. Maybe one more this year max. Just the us debt interest costs will be over a trillion.

Higher rates make leasing a better value versus financing.

yeah I have to wait until Q3 at the earliest because I am moving and want to make sure I have a garage. I would think manufactures still need to move the cars… I just hope I see similar prices for the cars I have been looking at

Higher rates will make leases and all payments go up. Thus manufacturers are rushing right now to do deals on leases. Now is a great time to lease.

How so? Can you explain why you think this?

Because in most states you only pay tax on the depreciation, or on the lease payments. Financing is always the entire cost of the vehicle so becomes much higher when rates are high, relatively speaking. At least thats the way I see it…

I’m confused by what you are saying. You are comparing the way taxing works on leasing vs financing. What does that have to do with rising interest rates? If rates rise, it would probably affect both leasing and financing rates.

I am not saying leasing wouldn’t get more expensive, I just think it seems more attractive relative to financing when loan rates are really high. The payments on a 30000 dollar car loan jump up to crazy numbers at high-interest rates, but lease prices seem to move more slowly.
I could be wrong.

I think it depends because both leases and financing could have incentives by the manufacturer? Like i have seen .00001 money factors here and 0 percent financing offers from dealers…

I see giulias for low 400 on honcker and wish i could make a move but i have a 70 mile round trip commute which should drop to 10 once i move in July