Consumer Price Index

Measuring Price Change in the CPI: Leased cars and trucks

The leased cars and trucks index, a component of the new and used motor vehicles index, is included in the transportation group of the Consumer Price Index (CPI). This index is only published at the national level due to low relative importance at the local level.

Item definition

The weight of leased cars and trucks in the CPI consists of consumer spending on new leased cars and leased trucks. The index covers leases on all classes of new consumer vehicles including subcompact cars, compact or sporty cars, intermediate cars, full sized cars, luxury or status cars, pickup trucks, vans, and specialty vehicles, including sport/cross utility vehicles.

Relative importance

The relative importance of an item category is its percent of the CPI weight as of December of the most recent year.

Table A. Relative importance, December 2018
Item Relative importance

Transportation

16.348

Private transportation

15.235

New and used motor vehicles

7.005

New vehicles

3.724

Used cars and trucks

2.391

Leased cars and trucks

0.656

Sample selection

The selection of retail outlets, where the CPI gathers prices for the leased cars and trucks index, is based on information from the Telephone-Point-of-Purchase Survey (TPOPS). On the initial visit to a retail outlet, CPI data collectors use a disaggregation process to select the sample of vehicle leases whose prices they will follow over time for the index. The disaggregation process is a probability sampling method that uses the proportion to dollar volume of sales to select from among all leases the retail outlet offers to consumers for new vehicles only. The CPI data collector describes each selected vehicle lease in detail including the vehicle make, nameplate, model, engine, transmission, options, and lease terms. The lease terms include items such as the number of months of the lease term, the down payment, the residual value, the depreciation amount, and the total rent charge.

Price change and quality adjustment

Price change

The value that the CPI uses in the leased cars and trucks index is an estimated transaction price that reflects the vehicle base price, destination charge, options, dealer preparation charges, applicable taxes, depreciation, and lease rent charge (the finance fee portion of a monthly lease payment, similar to interest on a loan). The estimated transaction price also includes the respondent's estimate for the price markup, dealer concession or discount, and consumer rebate.

The basic formula used to calculate the total monthly lease payment used in calculating the leased cars and trucks index is:

Base price of leased vehicle + transportation to dealer + total price of packages & options + dealer prep and miscellaneous charges + additional dealer markup – dealer concession or discount = capitalized cost (similar to the purchase prices of a vehicle)

- down payment (cash paid up front by the customer) – rebate – other capitalized cost reductions + tax (if included in the capitalized cost) + other additions to capitalized cost = adjusted capitalized cost (amount used to calculate base monthly payment)

- residual value (value of the vehicle at the end of the lease) = depreciation amount (the total amount charged for the decline in value)

+ total lease rent charge (the finance fee, similar to interest) = total of base monthly payments

/ lease term (the number of months in the lease) = base monthly payment

+ monthly sales tax and/or use tax = total monthly lease payment

Quality adjustment

Each year, the CPI performs a model year change over procedure for all vehicle indexes. For the leased cars and trucks index, the CPI replaces the old model with the new one when 50 percent or more of the leases written during the previous 30 days for the nameplate being priced are for the new model year vehicle. While new models may be introduced anytime during the year; they are most often introduced in the fall and are generally reflected in the CPI in September through February.

The leased cars and trucks index uses the same quality adjustment values to adjust for any quality changes between the new model year and the old model year vehicle used in the CPI new vehicles index. These values are based on costs provided by vehicle manufacturers for categories such as reliability, durability, safety, fuel economy, maneuverability, speed, acceleration/deceleration, carrying capacity, and comfort or convenience. The CPI also makes adjustments when equipment is added or deleted from the tracked model, but does not make adjustments for changes in mandated pollution controls. Additional information is available in the Guidelines for Quality Adjustment of New Vehicles Prices document.

Data

Access data for leased cars and trucks in our online database.

Additional information

Information on trends in leased cars and truck prices can be obtained from several other sources including The Federal Reserve Board, Ward’s Automotive, The Association of Consumer Vehicle Lessors, Kelly Blue Book, Leaseguide.com, and Edmunds.com. The mention of these sources does not constitute or imply endorsement, recommendation, or favoring by the U.S. Bureau of Labor Statistics.

The Producer Price Index program publishes an annual report on the quality changes to new models. The report provides the average model year changes in invoice price and a retail equivalent price, as well as the estimated value of quality changes. These reports are available on the PPI Archived Reports on Quality Changes for Motor Vehicles webpage.

Additional information may be obtained from the Consumer Price Index Information Office by email or calling 202-691-7000. Information on the CPI's overall methodology can be found in the BLS Handbook of Methods.

Last Modified Date: May 23, 2019