Short-Term Leases From 6 to 12 Months Are Becoming More Popular
When purchasing a new car, fewer people are buying one outright. Prospective customers are either holding onto their current vehicles, buying used cars, or, more frequently these days, opting in for a short-term lease. Even though a short-term lease is nothing new, automakers have started to see a rise in more customers choosing to lease a car as short as six months to a year.
Why Opt For A Short-Term Lease?
Everyone’s lifestyle has certain needs and those choosing to go with a car on a short-term lease typically would rather have access to a car when they need it, rather than depend on ride-share services or lifts from friends. If they need a means of transportation for a weekend getaway or a temporary grocery-getter, it’s right there waiting for them. All they have to do is pay the monthly fee like it is just another subscription service.
Auto brands started to notice an increase in short-term leases pre-pandemic, under the belief that there was a demographic of customers that wanted stability and low payments over flashiness and high-tech gadgets. A simple A-to-B vehicle is all they need. In fact, some automakers will allow customers to lease a vehicle for less than six months. They are more available and could inspire customers to make a full purchase in the future once their lease is up.
Brands like Polestar have been offering a “flexible lease” on the Polestar 2 since October 2023, and can be as short as five months. Viewing a short-term lease as more of “an extended test drive”, Polestar believes that they could develop a tighter bond with these newer customers, allowing them to experience the brand, and hopes they will stay part of the lifestyle when the Polestar 3 arrives.
In addition, previously-leased Polestar 2’s will look more appealing to customers operating on a tighter budget.
More Auto Companies Are In on Short-Term Leases
Dealers, rental companies, and even car-share companies like Turo, have been part of the short-term lease game for some time as well. AutoNation developed its Mobility division to give customers access to a wide range of automakers under a “micro lease”, ranging from six to twelve months.
But even still, the cost of leasing a car over purchasing one can get pretty close. A micro lease for a 2023 Dodge Challenger for 12 months under AutoNation calculates to $820 per month, and $2,400 up front, including maintenance. Calculate insurance and cost of gas into the equation, and you may be looking at a similar deal as someone looking to purchase a new car.