CINCINNATI—Growing interest in leasing is causing the percentage of lease credit approvals to fall, one expert reports.
Swapalease.com explained that lease credit approvals for March tumbled to 60.0% of lease transfer applicants, down from the 2015 average of 63.4%.
Swapalease.com connects borrowers wanting to exit a lease early with individuals looking to pick up a leased vehicle, often for a shorter term.
Lease credit approval volatility has been apparent over the last six months, with every other month surging above or below Swapalease’s “healthy” margin of 70% approvals the company stated in a release. Swapalease.com attributes the volatility to continuing trends that include rising borrowing for student loans and an overall increased appetite to take over a lease.
“When the overall volume of applicants continues to rise, it’s not uncommon to also find an increase in credit declines in the secondary market,” said Scot Hall, EVP of Swapalease.com. “Much of this activity is the result of car shoppers turning to the secondary market after their initial and unsuccessful attempt to lease at the dealer.”
Consumer borrowing to lease and purchase cars and trucks surpassed new highs in February, fueling a record total of $3.343 trillion in credit balances — not including mortgages, according to the most recent data from the Federal Reserve.