Although automotive leases accounted for only 19.3 percent of sales contracts on new vehicles in 2007, J.D. Power and Associates report that for the first two months of 2008, the number of cars being leased climbed 21.7 percent.

In an article for Automotive News a California multi-franchise dealer, Dave Conant, said "Everybody is looking hard at leasing because of the awareness of this recent disturbing trend of longer purchase contracts."

Lower monthly lease payments are being touted by dealers as an attractive choice over consumer loans whose terms of payment has been growing steadily lengthier.

Conant, who operates a Honda dealership with a high volume in Cerritos, a suburb of Los Angeles, said in January his lease rate was 27 percent and in February 38 percent. For all of 2007, Conant reported a lease rate of only 20 percent.

American Honda Finance Corp. is pushing leases on new Hondas and Acuras, posting lease penetration gains of 15.6 percent in 2006, 18.2 percent in 2007, and 23.1 for the year to date in 2008.

The J.D. Power report placed the average duration of new vehicle loans at 61 months in 2003 and 64 months in 2007. Eighty-four month contracts, offered initially by Toyota in 2007, have reached 4 percent of the company's overall loan business.

Tom Libby, an analyst for Power said, "When there are subvention programs on loans, leasing suffers. When manufacturers back off these programs, they are better able to put money in leasing."