Not the time to 'straitjacket' customers

Donna Harris covers automotive retailing for Automotive News

J.D. Power and Associates just released its "Industry Health Review," and the report contains some disturbing information.

The research firm says leasing is returning to normal after penetration rose to more than 20 percent of new-vehicle deliveries in the winter. After two months of declines, leasing accounted for 19.4 percent of new-vehicle sales at the end of April.

Meanwhile, there's been a slight uptick in loans of 72 months or longer. J.D. Power reports that these loans are now 25 percent of industry sales.

Lease contracts tend to run for two to three years, which means customers will be back for another vehicle at least twice as soon as they would if they're stuck in a 72-month term. Lease customers tend to be more loyal, happier customers, too.

So, with industry sales at last rebounding, do we really want to put customers in a six-year-plus straitjacket?

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