Lexus Leases Skyrocket as Technology Takes Over
Big advances in tech have turned a once long-term commitment into a short-term proposition.
Since their very inception, we’ve traditionally viewed automobiles as long-term purchases. In the old days, if you wanted a new car, you either paid cash for it or paid it off over the course of a few years. Then you racked up somewhere around 100,000 miles or more until it was time to trade it in. But over the last decade or so, car ownership has become more and more of a short-term proposition.
That’s because leasing has quickly become an incredibly popular alternative to buying. And the driving force behind that trend is technology. Tech features have become a huge part of today’s cars. And like our favorite electronic items, the speed at which that technology advances has grown tremendously. Cars that are only a few years old simply feel archaic compared to the ones sitting on dealer lots today.
So much like how we trade in our cell phones for new ones every couple of years, we’re also beginning to do the same with our cars. In fact, Edmunds recently reported a record leasing volume of 4.3 million cars last year. That’s an incredible increase over the 1.4 million vehicles under lease back in 2009.
Experts agree that new tech features like lane-departure warning and laser cruise control are the main reason why. After all, new technology often debuts on higher priced models, then appear as options on lower priced vehicles before becoming standard equipment. “Technological growth in these cars isn’t slowing down, and until it does, it’s less risky to lease,” Nick Hammes, an operations coordinator for Google, explained to the Providence Journal. “This way, I can see what the landscape looks like in three years.”
“Technological growth in these cars isn’t slowing down, and until it does, it’s less risky to lease.”
Lexus leases are among the most prevalent in the automotive industry. The automaker reported a lease rate of 65 percent this year, up from 61 percent last year. Obviously, they don’t mind, as it increases the frequency with which customers return to dealerships. And it helps maintain brand loyalty, as Lexus sales and production planning manager David Goldberg told the Providence Journal. “Leasing is always a good thing for us because it helps us retain customers.”
Considering the technological and groundbreaking safety innovations Lexus has rolled out in cars like the all-new LS, that number figures to climb even higher moving forward.
