Thursday, Dec. 05, 2013, 01:58 AM UPDATED 9:57 AMBy Auto Remarketing Editor Joe Overby
CARY, N.C. -
Leasing penetration is thought to have reached its highest level of the year last month and could get even stronger before 2013 is over, said Edmunds.com senior analyst Jessica Caldwell.
Specifically, it was forecasted that lease penetration was at 26.2 percent in November, up from 26.0 percent in October and 24.9 percent in November 2012, she said.
“The credit out there makes leasing so affordable,” Caldwell told Auto Remarketing on Wednesday afternoon.
But it’s not just the credit market that is leading to such strong lease rates, she added.
With leasing, dealers realize they have a “built-in return customer,” and consumers are also realizing the benefits of taking on a lease.
Leasing requires less of a time and maintenance investment than ownership, and in today’s on-the-go, busy world,
leasing often “fits more into a 2013 lifestyle,” Caldwell said.
There are also more lease offers out there. It’s not the high-end luxury brands anymore; mainstream staples like the Honda Civic are in the game and creating a “wide spectrum” of options for consumers.
Out of 33 brands listed in a data set from Edmunds, 32 were believed to have double-digit leasing rates in November. Twenty-six brands had projected lease penetration rates that were 20 percent or higher.
And this increased offering includes more robust leasing from the Big 3.
In fact, lease penetration for domestics was estimated at 20 percent last month, Caldwell said, and while that trailed the rates for the Big 3’s European, Japanese and Korean peers, it’s a “considerable jump” from where leasing has been for domestics.
Last year, leasing penetration for the Big 3 was in the neighborhood of 16 percent, failing to break the 20-percent threshold at all in 2012, she said.
In 2013, however, it’s been in the 19 percent to 21 percent ballpark. Everything from a compact car like Chevrolet Sonic to Buicks and trucks are getting in on the leasing action.
The Chrysler brand, for instance, was projected to have had a 26.7 percent leasing rate last month. GMC was thought to be at 20.9 percent. Buick was estimated at 23.6 percent. Chevrolet was close to 18 percent and the Ford brand was close to 21.
The projected November numbers are even higher for imports. European brands commanded an estimated lease penetration of 43 percent last month, while South Korean brands were forecasted at 27 percent and Japanese brands were projected to have reached 26 percent, Caldwell noted.
Overall, Caldwell said she “wouldn’t be surprised” if the industry-wide leasing figure is even stronger for December than the year-high figure from November, given how this month is quite solid for the luxury brands.
Edmunds also provided a breakdown of lease rates by brand, based on November forecasted data, which is below:
Acura: 30.9 %
Audi: 40.1 %
BMW: 48.1 %
Buick: 23.6 %
Cadillac: 34.5 %
Chevrolet: 17.8 %
Chrysler: 26.7 %
Dodge: 7.8 %
FIAT: 27.2 %
Ford: 20.7 %
GMC: 20.9 %
Honda: 27.2 %
Hyundai: 25.8 %
Infiniti: 58.8 %
Jeep: 24.0 %
Kia: 26.5 %
Land Rover: 18.1 %
Lexus: 46.6 %
Lincoln: 43.7 %
Mazda: 15.1 %
Mercedes-Benz: 51.3 %
MINI: 23.0 %
Mitsubishi: 12.6 %
Nissan: 25.7 %
Porsche: 23.7 %
Experian Shares Q3 Leasing Results
Elsewhere, Experian Automotive — which unveiled complete results from its Q3 State of Automotive Finance Market report on Wednesday — found that the lease market “continued to be a significant part of the vehicle finance mix, accounting for 27.22 percent of all new-vehicle financing” in the third quarter.
In the same period of 2012, lease penetration was at 24.40 percent, Experian indicated. In the second quarter of this year, it was at 27.64 percent.
Experian also found that the average monthly lease payment last quarter was $404. In Q3 of 2012, it was $409.