WESTLAKE VILLAGE, Calif. -

Though down from December — typically a lease-heavy month — the leasing industry started 2011 by again cracking the 20-percent penetration mark, according to data provided in the most recent Industry Health Review from J.D. Power and Associates.

Specifically, lease penetration was a 20.2 percent in January, compared with 19.2 percent a year ago. However, leasing dipped from the 21.6 percent level in reached in December.

“Really, (it was) just a function of the change in the industry sales mix,” J.D. Power senior director Thomas King told Auto Remarketing with regards to the month-over-month dip. “December is always a very strong month for luxury vehicles, where, of course, lease penetration is higher.”

January marked a return to more non-luxury sales, and as such, lease penetration declined on a month-over-month basis, King explained.

That said, the elements that were lifting leasing in December remained in January, King emphasized. Leasing was still “strong,” he stressed.

“The other structural factors we talked about last time remained in play,” King shared. “Those structural factors were really just the improving availability of funds allowing manufacturers to offer more competitive leases.”

Continuing on, J.D. Power offered the following table to break down lease penetration levels by segment:
 

Segment
 2008 CY
 2009 CY
 January 2010
 January 2011
 M-o-M Change for Jan, 2011
Y-o-Y Change for Jan. 2011
Comp Conv 12 percent 12 percent 20 percent 21 percent -8 percent 2 percent
Mid Conv 22 percent 16 percent 28 percent 27 percent -8 percent -3 percent
Large PU 5 percent 1 percent 2 percent 5 percent 58 percent 133 percent
Comp CUV 15 percent 12 percent 16 percent 22 percent 3 percent 33 percent
Mid CUV 18 percent 9 percent 16 percent 18 percent 3 percent 11 percent
C Prem Conv 46 percent 43 percent 50 percent 52 percent -7 percent 3 percent
Comp Basic 2 percent 2 percent 2 percent 9 percent 49 percent 400 percent
Mid Utl 28 percent 11 percent 14 percent 23 percent 3 percent 65 percent
Mid Van 21 percent 8 percent 18 percent 22 percent 0 percent 26 percent
Lrg Conv 15 percent 9 percent 16 percent 10 percent -34 percent -35 percent

Explaining some of the rather large percentage gains seen in segments like the large pickup category, King noted that the “percent changes are large, but in absolute terms the deltas are small — for example, large pickup lease penetration did rise by 58 percent, but only to 5 percent of pickup sales.

“These increases reflect the increased availability of supported leases on products which are traditionally less ‘lease-centric,’” he shared.

CNW Offers Leasing Insight

Moving along, CNW Research also provided some data regarding lease trends in January. The leasing industry began 2011 with January penetration rate of 23.79 percent, CNW indicated. The finance rate shared was at 69.16 percent and the cash share was at 7.06 percent.

“January’s finance share continues to indicate a growing interest in leasing and less interest in cash purchases,” said CNW president Art Spinella.

He added: “There’s been a switch from cash to leasing. Primary reason, lower payments and consolidation of family funds. That is, need a new vehicle, but don’t want to use funds (savings, checking, cash) that may be needed for other purposes.”

Breaking it down by some of the largest automakers, lease penetration for Ford was at 23.49 percent, General Motors was at 20.6 percent and Chrysler was at 13.17 percent.

Leasing commanded 28.59 percent of Toyota sales in January, 26.79 percent of Honda sales and 18.02 percent of Nissan sales, according to CNW.

Methodologies

To explain how these companies calculated their leasing figures, Auto Remarketing reached out to King at J.D. Power and Spinella at CNW.

Beginning with J.D. Power, King noted: “The data is from the Power Information Network, which extracts real-time transaction data from the software systems dealers use to run their dealerships.

“The dealers in the network account for approximately one-third of new vehicle retail transactions and are representative of national sales, and cover dealers from all of the OEMs in the industry,” he continued. “At these dealerships we capture data irrespective of who the lessor/lessee may be.”

Explaining CNW’s process, Spinella noted: "Leasing is calculated from a number of sources including insurance industry data, state revenue department data and surveys.

“Leasing data includes all sources (including independent lease companies which often are reported by manufacturers as cash sales) and all types including open- and closed-end,” he added.