Swapalease.com Notices Student Loan Debt Impacting Lease Applications
With potential impact from student loan debt swirling in the background, Swapalease.com reported lease credit approvals dipped slightly in November compared with October levels.
The year-to-date approvals for customer credit finished November at 72.6 percent, compared with October levels of 72.8 percent.
During the last three months, the lease credit approval rating has slipped to 67.9 percent, and under the 70 percent healthy level on the Swapalease.com marketplace. The credit approval rating has been on a downward trajectory since a 2013 high of 75.6 percent in July.
November approvals registered exactly 70.0 percent, compared with 61.1 percent approvals in November of last year.
Since the beginning of summer, site officials indicated more college graduates have started shopping for a vehicle on Swapalease.com. The company believes a growing number of applicants feeling student loan pressures have played a larger role in the credit decline category.
“Swapalease.com has historically had a large demographic audience between 35 and 55, but in the last few years our marketplace has appealed to other age groups that also include recent graduates,” said Scot Hall, executive vice president of Swapalease.com.
“Credit is the lifeblood of leasing, and each bank must evaluate the credit history of each applicant interested in taking over a lease,” Hall continued.
Hall pointed out that applicants who do not meet the bank approval criteria are offered credit repair options from Swapalease.com and are eligible to re-apply over time.
Company officials believe the credit approvals rate will continue to shift in the coming months.
“However, similar to the broader automotive industry, where auto lending has improved considerably since the recession, Swapalease.com credit approvals are markedly improved compared with the last two years,” Hall said.
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