As the cost of vehicles goes up, leasing is making a strong rebound in the market.  OEM and dealer advertising are putting a strong focus on their lease programs. And with extra money in their pockets (tax breaks, increased salaries, etc.) consumers are looking to upgrade their vehicles.  All this is good news for auto retailers.

The issue from a transparency viewpoint is the “low monthly payment and big down payment” advertising to lure consumers into the dealership.  At this point let me acknowledge the reasonable payment and “0” down programs, but we can come back to them later.

Let’s look at a popular sedan that promotes a $199/mo for 36 months lease.  Cash due at signing is $ 2439.  So effectively the “real” monthly payment is $266.75 once you divide the $2439 by 36 mos. and add it to the advertised price.  This particular manufacturers Internet ad did not even show the consumer how many miles per year was included in the lease.

Read the Full Article at Digital Dealer blog