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ATLANTA and NEW YORK — CreditForecast.com recently discovered through
data from Equifax and Moody's Analytics that most consumers looking to buy a
new vehicle are still financing their purchases with loans rather than leases.

However, analysts found the volume of leases is expanding
rapidly and expected to grow approximately 50 percent by the end of 2017.

Equifax and Moody's Analytics tabulated that total U.S. auto
lease balances increased 9.0 percent in March compared with a year ago, more
than twice the increase in auto loan balances, which grew by 4.2 percent over
the same period.

The firms also noticed lease balances originated by finance
companies in particular rose 11 percent in March versus a year ago. 

CreditForecast.com forecasts auto lease balances to grow at
an 8-percent average annual rate through the end of 2017, while auto loan
balances are expected to grow between 2 percent and 3 percent annually during
the same period.

"Auto finance companies have ramped up the number of leases
they are providing to well-qualified borrowers with higher credit scores,"
explained Amy Crews-Cutts, senior vice president and chief economist of
Equifax.

"Leases are growing in popularity in California, Florida and
the Northeastern part of the country," Crews-Cutts surmised.

Cristian de Ritis, Director of Consumer Credit Economics at
Moody's Analytics, added, "Growth in originations by auto finance companies
will drive further expansion in lease balances over the next five years. Auto
finance companies, who issue the large majority of auto leases, are more
sensitive to the growth of the U.S. economy, and as the economy grows, they are
likely to grow their auto lending originations faster than banks will.

"CreditForecast.com now provides a unique capability to
quantitatively and qualitatively analyze the unique dynamics of these markets,"
de Ritis went on to say. "The new data helps auto lenders and investors to more
accurately evaluate, model and benchmark their portfolios and credit
strategies, to account for the impact of current and expected local economic
conditions.

CreditForecast.com pointed out that lease financing
represents approximately 10 percent of U.S. auto lending provided by finance
companies, who originate a little more than half of all U.S. auto credit.  The site noted financing from banks and
credit unions comprise the remaining portion of U.S. auto lending.

More Lease Analysis in Luxury Segment

In related news, the latest commentary from J.D. Power and
Associates touched on leasing as well, tying together softening luxury model
retail sales to moderating leasing activity for those kinds of vehicles.

J.D. Power determined the retail sales share within the
luxury segment stood at 10.8 percent halfway through this month. A year ago, it
was 12.1 percent.

"The decline in luxury share of retail sales is one of the
reasons why lease penetration is down in April, as the luxury market typically
has a higher lease penetration than the non-luxury market," J.D. Power
indicated.

"Through the first 15 selling days in April, lease
penetration overall is 17.7 percent — the lowest level since December 2009 and
down from 20.2 percent in April of last year," analysts added.