Doctors, Lawyers in Luxury Cars Hurt Worst by Recession
Who's being hurt the worst by the economic recession? Surprisingly enough, it's male doctors, according to a report by LeaseTrader.com that analyzed which professionals are downsizing the most from expensive car leases. After all, if your can't afford $1,600 or so a month to lease a Maserati and is getting out of the deal early, you know the economy must be in bad shape.
"This is probably not the best time for doctors, financially speaking," said LeaseTrader spokesman John Sternal in a telephone interview with AOL Jobs. "reform and the recession (causing fewer people to be able to afford health care) may be leading to doctors' woes," Sternal added.
To be included in the report, a employment and place a car valued at $40,000 or above in the LeaseTrader.com marketplace to escape the lease contract. The professions analyzed are doctors, lawyers, Realtors, financial executives, and insurance brokers.had to list one of five specific industries for
When compared to the last time LeaseTrader did such a report, in 2008, a few stats stand out:
- Doctors topped the list with 54 percent listing vehicles such as Maserati, Mercedes S Class, and BMW 7 Series.
- Male doctors outnumbered female doctors, 69 percent vs. 31 percent this year, suggesting that women are doing better in the "mancession."
- Lawyers were behind doctors in the 2010 figures, with 51 percent of lawyers getting out of their car leases.
- Realtors were third at 43 percent, after leading the last survey at 68 percent -- which could be an indicator that the housing market is rebounding.
- Financial executives were fourth at 32 percent. This profession had the highest percentage of men -- 78 percent vs. 22 percent of women -- to get out of a car lease.
- Insurance brokers were doing better than the other professions, with only 17 percent opting out of leases.
The leases that these professionals opted out of through LeaseTrader typically run $600 to $1,100 a month, with most leases set for 12 to 24 months.
A popular arrangement
Luxury car leases are popular, Sternal explained, because the monthly payment is less than buying the car would be, and leasers can get a new car every few years when their lease expires without having the hassle of selling their car. Leases require a down-payment, such as $2,000 to $4,000 for a Mercedes, but can last as long as 48 months. The option to buy is offered when the lease is over, with the price being set at the start of the lease.
"For a lot of people, they don't want to hold on to a car after four years," Sternal said.
Leases are popular with real estate agents, for example, because a new car is part of their professional appeal to customers.
"They don't feel that it's appropriate to drive around in a 6-year-old car," he said.
Lawyer Jeffrey A. Devore of Florida, who specializes in U.S. immigration and nationality law, told AOL Jobs that the recession has caused his income to drop by about a third, causing him to change car leases twice in the past year so he could cut his monthly expenses.
Devore used SwapALease.com to get out of two leases. He was paying $1,100 a month to lease a 2008 BMW 750Li and had about a year left on a 36-month lease; and had a 2008 Cadillac Escalade that cost $875 a month that he was halfway through a 36-month lease. He said he spent a few hundred dollars in fees to transfer the leases, which took less than 48 hours once the BMW lease was available online, and 10 days for the Cadillac. He was released from both leases, and the buyer had to pay small transfer fees to the auto companies Devore was dealing with.
"I am now driving a 2010 Lexus IS 250C Convertible in lieu of the BMW for less than $650 a month (36 month lease) and I bought a 2010 Honda Pilot to replace the Escalade with no money down and 1.9 percent financing," he wrote in an e-mail to AOL Jobs. "Overall, my automobile costs are down approximately $800 per month from where they were, and my wife and I are happier with these cars than with the ones they replaced."
Options for getting out
There are three ways to get out of a lease before the contract expires, Sternal said:
- Go back to the car dealer and try to negotiate a deal, although the dealer is there to make money and will often try to steer the customer into leasing another car while transferring the debt from their old lease to the new one
- Go to the bank financing the lease, and try to get better terms.
- Sell the lease to someone else.
The funny thing is that since a car is a status symbol to professionals such as doctors and lawyers, as soon as they get out of an expensive car lease, they'll turn around and buy a used luxury car for less money, Sternal said.
Aaron Crowe is a freelance journalist in the San Francisco Bay Area.