Although not expected to be as dramatic (percentage-wise) as the increase in off-lease volumes this year,  the supply of late-model off-rental vehicles will likely show “nice steady growth” in 2015, including what Tom Webb describes as a “diverse mix of vehicles.”

 “And — probably very exciting for franchised dealers — in 2015, for the first time in many, many years, we’re actually going to have an increase in program cars,” he said during a press conference at the NADA Convention & Expo last week in San Francisco.

Webb, who is chief economist at Cox Automotive, said the program cars, especially, should be a nice fit with certified pre-owned operations at franchised dealers, as these stores will get the first crack at grabbing these vehicles.

And although the majority of the vehicles on the rental-risk side are typically purchased by independent dealers at auction, it’s not an overwhelming majority — Webb says it’s no more than 65 percent.

So, there is still a good chunk of rental-risk vehicles that end up on franchised dealer lots, he said, and they’re typically “amenable” to the CPO programs.

More on Growth in Program Cars

The 2015 Used Car Market Report from Manheim (which Webb authored) cites data from Auto Rental News indicating that there were 2.01 million units operating in rental fleets last year, a 6-percent increase. This aligns with reports from rental companies indicating that fleet utilization rates — outside of the recall impact in 2014 — has either been steady or rising.

“Those recalls, plus changing industry dynamics and pricing, will lead to a greater share of the rental fleet being composed of repurchase (program) cars in 2015,” Webb said in the report.

 “Avis anticipates that program units will rise to 50-percent of its fleet in 2015, up from 36 percent in 2014,” he added. “Hertz expects purchases to shift from 85-percent risk in 2014 to 70-percent risk in 2015. Enterprise, as well as the small independent rental companies, have always operated fleets that are close to 100-percent risk.”

According to the Manheim report, the overall volume of off-rental cars hitting wholesale channels last year eclipsed 1.5 million — and those numbers will only get bigger.

“In 2015, off-rental volumes are expected to increase to more than 1.6 million units and continue to grow in years following,” Webb said in the report. “The future growth in off-rental volumes will likely mirror the growth in the total rental fleet size, as we foresee no significant change in holding periods.”