(November 3, 2010) Now that the economy is recovering, Americans seem to be rediscovering leasing again. Leasing has reached its highest level in two years, according to the Automotive Leasing Guide (ALG).

ALG says that 20 percent of vehicle transactions are now leases, according to a report in Auto Remarketing. The increase in popularity has come from a mix of factors, including the rising popularity of two-year leases, ALG reported.

Two years ago, a sharp downturn in leasing by the domestic automakers signaled the beginning of the recession. ALG's new data indicated that leasing has been "revived" by the domestic manufacturers, while Toyota and Honda have "clearly stepped up leasing efforts in 2010," ALG analysts noted. Leasing has always been a popular form of financing for luxury car manufacturers such as BMW.

ALG also reports that residual values have increased, which is another way of saying that the vehicle's resale value is higher at the end of the lease. This translates to a lower lease payment for the consumer. Here is more information about residual values and an explanation of how lease payments are calculated.

Source: Edmunds.com