How is Car Leasing Impacted By the Inventory Shortage?

The pandemic caused a vehicle chip shortage, which dramatically slowed down automotive production. Unfortunately, limited supply means high demand and inflation. If you’re considering a lease around Sarasota, you may be wondering if now is a good time to lease a car. That depends. The average financed new car in 2022 sells for around $50,000, but rising residual values have affected leasing. 

Read our overview of how car leasing is impacted by the inventory shortage, so you can know everything you need to in order to evaluate whether leasing presents you with the best value. Once you’re done reading, get pre-approved and connectCox Mazda to start saving in Bradenton. 

Is Now a Good Time to Lease a Car?

With inflation going through the roof, you may be wondering how car leasing is impacted by the chip shortage. When leasing, you get access to a vehicle for 2 or 3 years and are expected to pay for the depreciation that occurs over the course of your term. The higher the residual value is, the more your monthly payments will be, so you can expect many leases to be a bit more expensive. 

Still, leasing is going to be more affordable than financing in many cases these days, and if you need a car now, it may still be the best option. And if you’re already leasing a car, you may be in a great position. Take a moment to review all the most important things to keep in mind as you consider leasing a vehicle near Tampa: 

• Future Deflation: While lease prices may be inflated, all finance prices are inflated too, but prices are expected to deflate once production returns to normal. Leasing may be a more affordable way to buy time until financing prices adjust. 
• Lease Renewals and Buyouts: If you’re already leasing and your lease is set to expire soon, it’s possible that the residual value stipulated in your lease agreement is much less inflated than whatever the vehicle would be worth in today’s market. In this case, you can buy out the remainder of the original value, which be an exceptional deal. You can also likely negotiate a lease renewal based on the original value of the car as well.
• Interest Rates: If you’re comparing leasing and financing, you’ll want to factor in the higher interest rates in lease agreements these days. Many leases have buried some of the inflated costs associated with leasing into higher interest rates, so as you weigh one value against the other, make sure you’re accounting for this variable. 

Trust Cox Mazda for Transparent Sales in Bradenton

Now that you’ve read our overview of how car leasing is impacted by the chip shortage, if you have questions about whether now is a good time to lease, or if you’d like to renew, buy out, or lease, call (941) 749-2790. Our staff can answer any of your questions, and walk you through your options with full transparency, making sure you’re finding your way to the best option for your needs. In the meantime, check out our guide on what to do if your lease is expiring soon, as well as our guide on whether to lease or buy!