CINCINNATI—Lease approval volatility, swings in the percentage of leases approved each month, is picking up in 2015, and one expert attributes that to leasing’s growing appeal that is attracting more subprime borrowers to the space.
Swapalease.com reports lease credit approvals for April came in at 78.6% during the month, a 31.0% jump from the approvals rate during March (60.0%).
The 78.6% approvals mark is the highest monthly acceptance rate dating back to last year, when 84.2% of lease transfer applicants were approved in November. The lease approvals volatility has remained entering 2015, as January numbers were above the healthy mark at 75.0%, but February and March both saw low numbers, reported Swapalease.com.
“Interestingly enough, the first four months of 2015 have displayed significantly more lease approval volatility compared with the first four months of 2014, which saw the approvals rate stay within the 67% - 70% range in each of the first four months,” the company said in a statement. This year’s volatility comes amid continued growth in auto sales and the lease market, with end-of-month light vehicle sales showing year-over-year growth of 4.6%.
“We expect to see continued turbulence in lease approvals, especially as the volume for lease applicants grows to include sub-prime shoppers turned away at the dealership,” said Scot Hall, EVP of Swapalease.com.