Why Flexible Car Leases will Disrupt the Auto Industry
“The salesman said it would cost $4,587 to buy back the car, in effect a 20 percent termination fee imposed on an elderly woman in declining health.”
This is what Sean P. Murphy, The Boston Globe’s Consumer Advocacy Columnist, reported in his recent story, “An auto dealership signed a four-year lease to a 92-year-old. Was she taken advantage of?” The piece focuses on a senior citizen who decided to never drive again after getting into an accident in her leased car. Yet, when she returned her lease to the dealership, the salesperson signed her up for another lease. The consumer immediately realized she had made a mistake, but the dealership would not let her out of her lease without a multi-thousand-dollar penalty.
At Flexcar, our team believes that the traditional business model of leasing is broken, and the future of having a car will be far more flexible than what’s reported in this story.
With traditional, long-term car leases, buyers must be aware of a range of potential costs and pitfalls. Think the lease you’re getting is a great deal? Don’t forget to ask about down payment amounts, taxes, and required insurance to get the car. Want to end your lease early? Like the person in this story, you’ll likely be on the hook for thousands of dollars. Returning your car after two or three years? Be ready for the dealer to charge you for any damage — however minor — to the interior or exterior of your car. After returning your lease, want to get a different car brand? Prepare for the salesperson to use every trick in the book to get you to sign up for another lease.
The entire traditional lease business model is focused on charging the consumer extra at every turn, while keeping them locked in for years with the current dealership. In most cases, the consumer gets the short end of the stick.
At Flexcar, we believe there’s a better way: offering a much more flexible car lease that’s great for the consumer and fair for the company providing the vehicles. Over the last few years, Flexcar has launched in markets across the US and drivers have driven more than 100 million miles in Flexcars. The surge in demand for Flexcars validates our belief that the future of car leasing is flexible. In the coming years, we think all consumers will come to expect the following from their car leases:
One monthly payment includes everything: If you lease a car, you will have to get your car insurance separately. You’ll also have to take your car to the mechanic regularly for maintenance and annual inspections, sign up for your own AAA membership or other roadside assistance program, and more. With flexible car leases, everything is included in your monthly payment.
No long term loan contracts: When you lease a car, you are locked into a financing or lease agreement for years. If your needs change, you’ll suffer a hassle and potentially a financial loss. Flexible car leases offer month-to-month flexibility, so if your needs change, you can cancel anytime without penalties.
Zero down payments: Leasing a car often comes with a multi-thousand-dollar down payment. With flexible car leases, there is zero down payment. In fact, drivers that use flexible car lease companies like Flexcar can save over $2,000 upfront compared to the costs of buying or leasing a car, and up to 20% on monthly payments.
Swap out cars as your needs change: Let’s say your kid is home from college in the summer and you need a bigger car for a few months. Or, you prefer having an all-wheel drive vehicle for the winter and a sports car for the summer. Flexible car leases let you cancel anytime, and give you the flexibility to get the car you need for any season or occasion!
If you want to learn more about how flexible car leases work, visit https://www.flexcar.com/.
