LAS VEGAS -- The continuing popularity of leases can be attributed to the deals offered by manufacturers, positive media coverage of leasing and the current economic climate in the United States, Buzz Doering told attendees of the F&I Conference & Expo in early November. Doering is an automobile lease consultant with Doering Leasing Co.

Automakers are coming out with more flexible lease plans to fit the needs of customers. For example, General Motors recently raised its advance from 110 percent to 120 percent of MSRP to accommodate the negative equity seen with so many customers, Doering said. Ford Motor Credit and other manufacturers have also expanded beyond standard leases that allow 15,000 miles per year. Customers can now take advantage of low-mileage leases at 12,000 miles and super-low-mileage leases at 10,000 miles.

Rising interest rates are also prompting more consumers to consider leasing. Rates have increased 12 times in the last 15 months in a trend that is expected to continue. Doering said a lesson he has learned throughout his career is that higher interest rates help leasing.

"An interest rate puts an economic use value on an asset," Doering explained. "The higher the economic use value is, the more people tend to hoard their own."

Pete Gerosa, vice president and general manager of sales, service and parts for General Motors North America, also gave Conference attendees his perspective on the state of leasing. Today’s automotive industry looks quite a bit different than in years past, with leasing accounting for 21 percent of all retail deliveries.

"Leasing fosters stronger relationships between dealers and their customers because it shortens the trade cycle," Gerosa said. "Financing is no longer just finding the best deal for the dealership and the customer. You now have to help the customer with rates, rebates and the decision about whether to lease or retail."