LOS ANGELES -- Toyota Financial Services wants to bring its leases up from 6 percent of total business currently to 16 percent, on a monthly basis, by year's end.

In 1999, the financial arm's leases on Toyota vehicles made up 25 percent of its business, reported Automotive News. But low interest rates and high cash incentives, along with fewer subsidies on leases, have enticed consumers to buy rather than lease in the past few years. A drop in residual value also contributed to the decline in leases. Still, TFS' leasing business is strong because the Toyota Division's overall sales increased from 1.29 million units in 1999 to 1.59 million last year.

"Leasing increases loyalty more than anything else," said George Borst, TFS president, to Automotive News. "When someone leases with (TFS), that gives us another 10-point loyalty bump compared to leasing through a third party."

Leasing should become more popular as interest rates rise, said Steve Gordon, TFS' national manager for product and pricing.