Leasing rates are at an all-time post-recession high, approaching 30-percent penetration of all vehicles bought in 2013. This article speaks to what the industry and dealerships are doing to attract women toward leasing.

Much has happened to almost double the leasing rates from just five years ago. This exponential growth is attributed to the sum of manufacturers making excellent quality automobiles, improved lease offers and more informed buyers in the showrooms.

According to Scot Hall of Swapalease.com, of the projected 4 million leased on vehicles on the road by the end of 2013, roughly 70 percent of these vehicles leases are by men and 30 percent by women.

To explain these numbers more thoroughly, understand that many leases bought by the couple are under the man’s name, and many leases tend to be bought by entrepreneurs and executives, which also skews male. Additional Swapalease research shows that 42 percent of women have never leased a car, compared to over 23 percent for men.

Why Such Disparity?

Women historically have held strong to the belief that ownership and equity are good. That may be true for “investments,” but a car purchase is rarely an investment. The ownership “mindset” coupled with lack of past transparency, education, and high termination fees or excess mileage, left most women buyers dogmatic about outright purchasing. Leasing felt too risky and economically irresponsible.

Mystique is Gone — Just Show me the Monthly

Give credit to the manufacturers and dealerships, as well as new web-based companies that have taken the mystique out of leasing. Now, one does not need a “math lab” to figure out leasing, lease payments and the residuals payments. 

Jim Barndt, general manager at Kelly Car Buick GMC, reports that leases account for 42 percent of all new-car transactions at this store. Since the economy has recovered, many buyers are unwilling to put themselves in a financial hardship again.

Naturally, circumstances affect the way a woman buys a car and the vehicle she chooses — like, for example, having a child or getting a new job. Locking herself into a 72- or 84-month long-term contract is not as appealing as it once was.

With the cost of an early 2014 vehicle retailing around $33,000, leasing a car is the same or less per month than buying it outright. With the number of women and families budgeting and living month to month, this form of ownership is gaining appeal. Leasing also mitigates concerns about servicing and repairs.

A Win-Win

For dealers like Brandt, he prefers that his customers lease. While he may make a little more money on purchases, his dealership’s retention rate on leases is much higher with leases, at a remarkable rate of 65 percent.

“I would much rather see my customers every two or three years than sell them a car and see them only when the warranty has run out,” he said.

The win-win? Leasing allows for more interaction between the dealer and their customer. Consumers get to be in a newer vehicle with newer safety, technology and styling.

Having low dealership staff turnover allows the sales advisers to be highly trained in the economics and benefits of leasing. At Kelly GMC Buick, there is a process in place that yields high results. The sales advisers present each customer several financial options of what it costs to lease versus what it will cost them to buy. They give all customers they time needed to choose what makes best sense to them.

Add to that, this truly customer centric dealership offers a three-day money-back dealership. The entire process removes any barrier and the thought of ‘being pressured.’

Report Shows Leasing Leads to Better Dealership Experience

Women-Drivers.com, the leading car dealer review site for women and their families, mines data from reviews when leasing. They report that women have a better dealership experience when leasing. Here are highlights of this year-to-date report:

-Overall WSI* score when leasing vs. purchasing:   4.74  vs.  4.64

-Satisfied with sales advisers ability to listen and answer questions:  4.78  vs. 4.62

-Felt they were treated respectfully by sales adviser:  4.83 vs. 4.67

-Would recommend their sales adviser: 95.7 percent (Lease)  92.3 percent percent (Purchase)

-Emotions when Leasing vs. Purchasing:

• Excited: 56.1 percent percent vs. 54.7 percent percent
• Confident: 31.9 percent  vs.  26.7 percent
• Apprehensive: 24.1 percent  vs. 31.5 percent
• Confused: 7.7 percent    vs.   10.1 percent

-Visited just one (1) dealership when leasing (64.4 percent) vs. when purchasing (55.4 percent)

-Bought from this dealership before (33.7 percent) of those who leased vs. (29.8 percent) of those who purchased

Two areas that showed room for improvement when leasing are:

-I was satisfied with the financing methods and process:  84.6 percent when leasing vs. 91.9 percent when buying

-Information on the dealer’s website was helpful: 61.4 percent answered “No” when leasing vs. 50.2 percent when leasing

*WSI indicates Women Satisfaction Index, shown in a score of 5.0 (excellent) to 1.0

Where are the Opportunities?

There are cultural shifts taking place being influenced by women and Millennials (born 1984-2000) alike, and the common denominator is finances. More and more young people under the age of 30 don’t own a home or car. In fact, many still live at home.

When getting ready to get a vehicle, many look to car-sharing and leasing as smart alternatives. For almost the same monthly payment, or less, they can get upgraded features and have little downside to long-term repair costs. Still, they can buy the car at the end of the lease if they want to.

The industry must continue to educate consumers by making leasing a simpler, more transparent process. At the dealership level, this begins by asking questions and finding out what the customer needs and wants from a financial commitment. And, also listening for what is on their horizon.

Anne Fleming is president & car-buying advocate at Women-Drivers.com.