LAS VEGAS—A new study shows that leasing as a financing option for new vehicles has grown 76% since 2008.
The report from Experian Automotive also indicates that more than 1.8 million vehicles will come off lease by the end of 2016 (April through December).
“With such a large volume of vehicles coming back into the market, consumers, dealers and lenders will want to better understand the options available to them so they are able to take action,” said Melinda Zabritski, senior director of automotive finance for Experian. “Whether it is deciding to lease again or buy used, restocking inventory or marketing to potential borrowers, gaining insight into these trends will provide the knowledge necessary to make smarter decisions for all parties involved.”
The study also looked at the areas that have the greatest volume of vehicles coming off lease. The top three demographic market areas are New York, Los Angeles and Detroit.
When looking at vehicle types that are leased most often, the analysis shows there have been some significant shifts in consumer preference. Current leasing vehicle segment preferences include entry-level crossover utility vehicles, standard midrange cars, lower midrange sedans, near-luxury/upscale vehicles and premium crossover utility vehicles.
However, when looking at the vehicles currently being leased compared with those coming off lease, the analysis shows that there has been a surge in the percentage of full-size pickups and entry-level sport utility vehicles being leased, with growth of 56% and 79%, respectively. On the other hand, upscale luxury vehicles and alternative-power/hybrid vehicles have seen a decline in the volume of on-lease versus off-lease vehicles by 28% and 50%, respectively.
“As vehicle prices have been on the rise, we have seen consumers using several tactics to keep their payments more manageable. Leasing over the past several years has grown as consumers are drawn to the lower monthly payment,” continued Zabritski. “What’s interesting, however, is that the types of vehicles are changing. Instead of fuel-efficient hybrids, consumers now are leasing full-size pickups, SUVs and CUVs. So, what happens three years from now? Will gas prices be what they are today, or will dealers have a more difficult time moving these types of vehicles when their leases mature?”
From a model perspective, the top leases returning to market (which represent 28% of all leased vehicles returning to market) include Toyota Camry, Honda Civic, Honda Accord, Toyota Corolla, Honda CR-V, Ford Escape, Nissan Altima, Ford Fusion, Lexus RX 350 and Toyota RAV4.