Swapalease.com reported that the approval rate for vehicle-lease credit applicants on its website finished 2019 at a strong pace.
Site officials reported this week that the approval rate came in at 72%, marking a rise from the November rate of 67.1%.
Swapalease.com found that December contained a slightly higher number of applicants with qualifications for taking over another person’s lease contract, leading to one of the highest approval rates for the year. September was the strongest month of the year with a 72.9% approval rate followed by May with a 72.4% approval rate.
The site pointed out the approval rate to finish the year was consistent with 2018 data that showed 71.4% of applicants were approved.
December’s rate also marked a notable improvement compared to the end of 2017 when only 62% of applicants were approved. To finish 2016, the approval rate was even softer as Swapalease.com recollected that it was just 54.2%.
Swapalease.com executive vice president Scot Hall examined the approval trends and offered this assessment.
“In 2018, we reported on the strength and confidence of the American consumer in the economy with consistent improvements in credit approval ratings throughout the year,” Hall said in a news release. “In 2019, we saw even stronger approval ratings as well as an increase in shoppers seeking alternative outlets such as Swapalease.com for their next vehicle.
“We anticipate continued strength entering 2020, but it will be interesting to see if any changing interest rate levels will impact credit approval rates,” he went on to say.
Dealer principals and general managers likely are used to seeing the healthy pace of their mainstream new models departing the store as a leased vehicle. In fact, Experian reported 28.76% of new models left franchised stores as a leased unit during the third quarter.
Well, leasing of exotic and vintage vehicles appears to be quite active, too, at least for Premier Financial Services (PFS), which specializes in this particular market.
PFS reported on Wednesday that overall leasing growth and demand for vehicles such as Ferraris, McLarens and Lamborghinis have remained strong over the past decade. From 2009 through 2019, the number of units financed by the company increased 85%, and the total dollars financed grew 178% during that period.
Since 2016, Premier Financial Services indicated vehicles financed and total dollars have increased 21% and 38%, respectively. PFS insisted this three-year performance is good news for what the company believes are “serious auto enthusiasts,” demonstrating that higher values for premium vehicles over the past decade are not based solely on their improvement relative to market pricing in 2009, during the economic recession.
“Our results over the past decade suggest that market interest in exotic, vintage and luxury vehicles has continued to grow,” PFS founder and chief executive officer Mitchell Katz said in a news release.
“Despite stock market fluctuations during that period, and generational shifts in taste with respect to specific marques, the number of serious automobile enthusiasts is currently at record levels,” Katz continued.
“Although nearly half of Premier’s lease transactions over the past decade came from returning clients, our growth also reflects many first-time owners and collectors from all age categories — including millennials, Gen-Xers and Baby Boomers — who appear to be unwilling to wait for retirement or to win the lottery before they can acquire the car of their dreams,” Katz went on to say.
Specialty leasing has gained wider acceptance as a financing strategy, according to Katz. He explained that specialty leasing — which is unlike closed-end lease arrangements orchestrated by captive finance companies — can provide car owners with greater flexibility, such as favorable options for lease termination.
Katz noted that feature is particularly important to exotic and vintage car owners, who often move in and out of cars on a frequent basis. In fact, Katz noted, the average length of a Premier client’s lease is around 24 months.
PFS went on to mention the industry’s traditional barometer for evaluating current market conditions has been based on supply and demand for new exotic models, as well as auction sale prices of vintage cars each year at well-known venues including Pebble Beach, Scottsdale and Amelia Island.
“Premier’s performance over the past 10 years, however, may provide a more reliable, long-term indicator of the industry’s health and outlook. In fact, many industry funding sources rely on PFS for accurate estimates of residual values for exotic and vintage cars,” the company went on to say.
Wantalease.com is looking ahead to one of the most romantic holidays on the calendar, not only reporting the most attractive lease offerings available in January but forecasting which red vehicles will be best to lease for Valentine’s Day.
Site officials recapped this week that several manufacturers offered attractive discounts and competitive pricing on midsize cars and SUVs, while most compact cars and full-size vehicle brands maintained their lease prices.
And if your store has a customer looking for a lease as part of that romantic holiday, Wantalease.com indicated the top three red vehicles to lease for Valentine’s Day are:
—The Audi A6 Premium in Red Metallic: The Audi A6 saw the largest price drop in January, with a -14.51% decrease in price. The vehicle is currently priced at $419 per month and offers a variety of tech options such as Apple Carplay, Amazon Alexa and SiriusXM to name a few.
—The Subaru Legacy 2.5i in Crimson Red Pearl: The Subaru Legacy experienced a -4.46% price drop in January, bringing monthly lease payments down to $308 per month. The vehicle boasts a symmetrical all-wheel drive system as well as premium driver assist technology.
—The Ford Explorer in Ruby Red: The Ford Explorer is another vehicle that experienced a significant price drop in January. The Explorer had a -12.84% price drop, bringing monthly payments to just $289. The vehicle has intelligent 4WD that optimizes powertrain and braking systems, allowing the vehicle to deliver the right amount of traction to match all driving conditions.
While the Explorer, Legacy and A6 experienced the greatest price drops in January, site officials pointed out the Nissan Sentra is the most affordable vehicle of the month. The Sentra has maintained its price for the past three months, with monthly payments as low as $139.
“It’s apparent that manufacturers are still holding steady to many of the discounts they offered throughout the holiday season to kick off the new year,” Wantalease.com executive vice president Scot Hall said in a news release.
“With tax season just around the corner, many automotive brands will surely continue to offer attractive lease deals moving into April,” Hall continued.
Wantalease.com added the vehicles with the largest increase in monthly payment include the Chevrolet Equinox with a 15.92% increase and the Ford Ranger with an 11.87% rise. The site said the Chevrolet Equinox is currently offered at $289 per month, while the Ford Ranger is available for $273.
Wantalease.com spotted leasing opportunities that could help franchised dealers finish 2019 on a high note.
Site officials reported the Nissan Sentra is currently priced the lowest of all vehicles, with payments as low as $139 per month. The Ford Focus is not far off with new lease payments sitting at $159 per month, followed by the Honda Civic at $169 per month.
While most vehicle prices have remained steady in December, Wantalease.com noted some dealers have offered lower lease pricing on vehicles of all sizes, mostly in anticipation of December and holiday specials.
The vehicle that saw the largest price drop coming into the month of December is the Nissan Frontier with a decrease of 8.59%. The truck is offered at $271 per month, followed by the Volkswagen Jetta at $229 (down 7.93%), the Lexus RX 350 for $419 per month (down 6.16%) and the Toyota RAV4 at $279 per month (down 5.64%).
“It is clear manufacturers are making a final push to achieve year-end sales targets to close out 2019,” said Scot Hall, executive vice president of Wantalease.com.
“Just as we saw last year, many automakers continue to offer competitive pricing for non-luxury models to enable healthy competition against luxury holiday specials,” Hall added in a news release.
Site officials added the vehicles with the largest increased monthly payment are the Nissan Titan with a 36.87% jump and the Nissan Altima with a 20.23% climb in price. The Nissan Titan is currently offered at $315 per month, while the Nissan Altima is offered for $229.