I saw this today and was astounded by it, though not at all surprised given my take on the economy. ZeroHedge reports on Bank of America calculating car leasing vs. car buying:
So with car sales through the roof, the US consumer must be alive and well, right? Wrong, because there is one problem: it is car “sales” not sales. As the chart below from Bank of America proves, virtually all the growth in the US automotive sector in recent years has been the result of a near record surge in car leasing, not outright buying.
The difference is not trivial, as healthy consumers would be of greater propensity toward purchasing. The leasing option, requiring less or no money down (or trade) and often lower monthly payments, is almost perfectly tailored for consumers with limited (and growing more so) resources. That observation seems to be bolstered by BofA’s data which shows a very marked decline in buying, though uninterrupted leasing, beginning (where else?) in the middle of 2012.
Not surprisingly, Bank of America sees this optimistically as an untapped market waiting to be unleashed, when I think there is little doubt, in actual economic context of actual wages, it just adds another very important, hard dollar piece to the confirmation of the slow burn and descent.
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