If you’ve been eyeing the new Honda CR-V for your next lease, you might have to rethink or reset your expectations. The massive shortage of inventory across the country has left a nasty impact on the entire auto industry. It’s easy to see how this shortage impacts new car availability and used car pricing, but how are Honda leases impacted?
Supply and Demand
More often than not, when you lease a new car or SUV like the Honda CR-V, you get a lower monthly payment than you would financing a full purchase. Dealers can charge you less because they’ll get the vehicle back and on the sales floor in just a few years. That may no longer be the case.
The rule of supply and demand shows that when there is a high demand on a low supply, prices can go up. That’s exactly what’s happened with new cars. Since fresh models are in low supply and high demand, manufacturers and dealers can raise prices.
With fewer cars available, you might have to pay a little more to get Honda leases. You might also have to wait until the vehicle you want is actually available. The rise in prices can actually make a monthly loan payment less expensive than a lease deal.
Honda Leases Have Challenges
There are more elements impacting leasing than just the shortage of new cars. Of course, the lack of vehicles is definitely the most significant thing at play. Manufacturers used to make more than enough vehicles. They would end up offering incredible deals to get at least something back for the surplus. In some cases, auto brands would actually lose money.
Another factor that is changing how shoppers think about leases involves fewer incentives and rebates. Most companies are pulling back on the incentives. With the high demand for cars, there’s no reason to offer cash back, lower interest rates, or anything else to get people in the door.
A final thing to consider before signing a lease for a new Honda CR-V is that residual values aren’t necessarily changing with the market. In the past, a lease’s payment amount was determined by its residual value, how much the car will be worth when the lease is over. In theory, the rising price of used cars should make higher residuals and thus lower lease payments. Sadly, since there aren’t many cars available to compete, lease prices aren’t reflecting these rising residuals.
There Are Still Options
You might find yourself in a position where leasing a Honda CR-V is still a good option. Fewer people are leasing these days, but there are still options. One option to help keep your payments down is to lower your annual mileage allotment. The gold standard for annual lease mileage was 12,000 miles. Shoppers are now pushing for 10,000 miles or fewer. Of course, you have to be careful as going over the mileage allotment can end up being more costly in the long run.
Shoppers who are looking to upgrade their vehicles should consider all of the factors before making a move. It might end up being cheaper to purchase your next Honda CR-V outright. They should also leverage the increasing value of their current vehicles for trade. Since dealerships are desperate for certain models, you might be able to arrange a great deal. Otherwise, you might just have to wait until things calm down if that ever happens.
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