Lease Share at 25 Percent; Top Reasons for Leasing
In a Kelley Blue Book analysis released late last month that pointed to April being “another solid month” for the new-car market, KBB senior analyst Alec Gutierrez attributed some of the sales strength to enticing lease deals.
Along with “rising consumer confidence and improving employment conditions,” Gutierrez said in the April 28 report that new-car sales “also are supported by improved credit availability, low interest rates and attractive lease offers.”
Over at Cars.com, chief analyst Jesse Toprak echoed some of the same sentiment a few days earlier: “Demand for new cars was fueled by low interest rates, very attractive lease specials and perhaps the best selection of models consumers have ever seen — across all brands.”
Interestingly enough, attractive lease deals were among the factors that Juan Flores, director of operations for the Trade-In Marketplace at AutoTrader.com, cited for a certain luxury model being somewhat hard to find earlier this spring.
According to used-car scarcity data that AutoTrader provides to Auto Remarketing, the Mercedes-Benz CLA Class was one of the vehicle that stood out nationally in March.
The CLA was the scarcest certified pre-owned vehicle in the country in March and ranked fourth on the list of hardest-to-find late-model used vehicles.
“The presence of the Mercedes-Benz CLA on this list is great for Mercedes Benz dealers. The introduction of a very refreshing style combined with attractive lease offers has stimulated consumer interest to a level that CPO consumers are paying attention,” said Flores. “Dealers should expect this level of vehicle scarcity for quite some time, or at least until the current CLA lease volume returns to market 24 to 36 months from now. The OEM should be very proud of this accomplishment.” To read more on scarcity trends, see here.
But it’s not just the offers that are strong in the leasing market right now — the penetration rate is quite strong as well.
“Leasing has accounted for approximately 25 percent of all retail sales so far this year, a trend which is supported by a continued strong outlook for used-car values along with low interest rates,” Gutierrez said in the KBB analysis from April 28.
In a similar vein, CNW Research dedicated part of its April Retail Automotive Summary to look at why consumers choose to lease.
According to its data for calendar-year 2013, 41.6 percent said they leased to get a lower monthly payment, while 27.5 percent said it was because of a low (or no) down payment.
Next, 16.6 percent cited the desire to have a nicer ride, 9.4 percent felt it was a better use of their money and 3.7 percent pointed to tax considerations. Lastly, 1.2 percent said it was because they didn’t have to deal with “trade-in hassle.”