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CNW Charts Consumer Response to Fewer Leasing Options

August 18, 2008

BANDON, Ore. — As some automakers and many third-party lessors drop out of the lease market, consumers are adjusting their leasing and buying practices, according to a new study by CNW Marketing Research.

The Bandon, Ore.-based market research company surveyed more than 11,000 lessees whose lease contracts end this year and founda growing percentage will buy their existing leased car or truck, 17 percent in 2008 compared to 10 percent in 2007. 22 percent of lessees in 2008 will buy a new vehicle, compared to 14 percent in 2007. Seven percent of respondents said they will buy a used-vehicle on a long-term contract in 2008, compared to 3 percent in 2007.

The percentage of lessees who plan to lease from another automaker dropped from 48.76 percent in 2007 to 27.82 percent in 2008.

If a lease is not available on the type of vehicle currently being driven, more than half of those surveyed said they will move to a segment that does offer a lease.

Despite this data, CNW believes the leasing industry remains viable and strong because consumers prefer contract terms that are shorter, about 40 months, than the current finance average of 70 months. Wile some business will be lost because of lessor drop

outs, as the CNW report shows, it is just as likely to drive former and current lessees to another brand rather than convert

them to finance customers.

In July, 21.4 percent of new car shoppers changed their primary brand consideration as bargain hunting and the belief in similar-quality vehicles from brand to brand encouraged less emotion and more practicality in vehicle choices.

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