Finance rates on lease offers are difficult to understand, and automakers haven’t done enough to make understanding them easier, concludes a report by a personal finance website.
WalletHub, in its 2016 Labor Day Auto Finance Report released Aug. 31, gave the industry an average “transparency score” of 4.68 out of 10 for leasing.
“Leasing offers are the most difficult type of car-purchasing arrange-ment for consumers to understand, as they lack the equivalent of an [annual percentage rate] that can be used for comparison purposes,” WalletHub said in the report.
“As a result, the transparency of manufacturers about these deals is integral to a consumer’s ability to make informed decisions.”
But the report, which looks at where things stand for the third quarter of 2016, also recommends that consumers in the market for a new-vehicle loan start their search by examining deals offered by automakers because their interest rates are often lower than rates offered by other financial institutions.
The report researched loan interest rates and lease finance offers from automakers representing 22 vehicle brands, 52 credit unions and 84 national, regional, small and community banks.
WalletHub analyst Jill Gonzalez said new-vehicle loans offered by automakers merit consumer consideration because their average interest rate of 1.45 percent is lower than the average of rates of credit unions and banks.