In what could be considered encouraging signs on a number of fronts, J.D. Power and Associates discovered that May leasing levels moved higher both month-over-month and year-over-year.

According to J.D. Power’s May Industry Health Review, May’s lease penetration settled at 20.9 percent, up 1.5 percent from the previous month and 9.4 percent from the same month last year.

Analysts spotted five vehicle segments that made double-digit leasing gains last month. Included in that bunch were compact conventional models (up 15 percent), large pickups (up 14 percent), compact crossovers (up 28 percent), midsize crossovers (up 12 percent) and subcompacts (up 16 percent).

With nearly half of 2012 gone, J.D. Power senior director Thomas King believes the leasing levels franchised dealers witnessed through the first six months of the year should continue as the rest of the year rolls along.

King told Auto Remarketing recently that he expects lease penetration for the balance of 2012 to be similar to year-to-date levels — holding at 20 percent to 21 percent.

“Although we do anticipate greater volatility on a monthly basis,” King cautioned, adding the factors that could sway the net impact leasing penetration.

Those factors included:

—Continuation of depressed lease-return volumes due to the decline in leasing in 2008 and 2009.

—Continuation of elevated 72-month (and longer) loan penetration, which provides consumers with reduced monthly payments and an alternative to leasing.

—Continued recovery of the subprime market, which is contributing to overall industry growth but has a limited impact on leasing (lower credit buyers have a low propensity to lease).

—Luxury vehicle sales recovering from a slow start to the year as luxury buyers have a high propensity to lease.

—New product activity as OEMs are planning multiple new and redesigned products, typically using incentive tactics biased to lease customers rather than cash/finance buyers.

King also explained any leasing trends that might unfold based on which vehicle segment and brand.

“In all segments, we expect to see volatility as manufacturers sell down old models prior to the launch of new/redesigned models,” he stated. “During sell down, manufacturers tend to use elevated cash and finance incentives, while new-model incentives are typically biased towards leasing in order to take advantage of strong residuals on the new-model-year/redesigned products.

“Lease penetration will likely peak at the end of the year as luxury brands launch their traditional year-end sales initiatives,” King added.

Turning back to those new-vehicle contracts lasting 72 months or longer, J.D. Power said that the level softened a bit last month, but the penetration still landed higher than May of last year.

The firm determined the penetration of 72-month financing terms came in at 27.9 percent, which was 4.2 percent lower than April’s reading of 29.2 percent. However, the May reading ended up 6.9 percent higher than the year-ago mark of 26.1 percent.

Analysts found four vehicle segments made jumps of at least 15 percent year-over-year in connection with 72-month financing. That group included large pickups (up 15 percent), midsize utilities (up 17 percent), large conventional models (up 21 percent) and subcompacts (up 23 percent).