CINCINNATI -

As leasing continues to pick back up, boding well for future used supply, Swapalease.com recently conducted a nationwide survey that showed which brands are top-of-mind for consumers considering a new lease.

On the luxury side of things, the highest scoring manufacturer was Porsche, with 39.8 percent of participants — which consisted of more than 3,000 leasing drivers — saying the brand is very desirable for leasing.

Why the interest in Porsche?

“No. 1, as you move up the luxury car spectrum, the lease penetration rates rise dramatically,” Scot Hall, executive vice president of Swapalease.com, told Auto Remarketing.

He offered the following example: Automakers such as Ford and Chevy normally have a lease penetration of 20 to 25 percent, while brands such as BMW and Porsche tend to range more towards the 50-percent mark.

Hall said there are a few factors behind this trend.

First, a considerable amount of potential buyers and leasers for Porsche will be business owners, and Hall said that many of these individuals are drawn to leasing because of potential tax advantages.

No. 2, even though buyers are going to typically be affluent individuals, Porsches are simply expensive cars and leasing makes it a more affordable option.

Lastly, Hall said residual values plays a large part in leasing interest, as well.

“With used-car values being so high right now and Porsches being as desirable as they are that means their residual values are very strong, typically making their lease payments very attractive,” Hall said. “The higher a residual value on a lease, there is a smaller 'window' you are paying for, for that particular vehicle.”

Overall, when asked to compare car brands for leasing, 68.1 percent of participants said Toyota is “more on the forefront of car leasing today,” while 51.3 percent mentioned Ford.

For Toyota, many of the reasons leasing is attractive for Porsche remain the same for the Japanese automaker, Hall said.

“People perceive Toyota and Porsche to manufacture a quality vehicle, a desirable vehicle. Even though there were a few hiccups with Toyota a few years ago, they seem to have come out on top, if not stronger than before,” Hall explained.

“Similar to Porsche, Toyotas are known to very solid, reliable durable vehicles, meaning that they do hold their value well.”

These survey results came in just after new-vehicle leasing during the first quarter rose to the highest level since the firm began tracking the data in 2006, according to data from Experian Automotive.

According to its State of the Automotive Finance Market report, Experian indicated leasing accounted for a record 27.5 percent of all new vehicles financed during Q1. The level jumped 12.5 percent from the year-ago mark of 24.4 percent.

Hall commented on this trend, citing a few reasons why leasing is rising in popularity.

First, advancing technology is playing a huge factor, Hall shared.

“All of the technology in vehicles is changing so fast, consumers don’t want to get stuck with 2011 technology in 2017. They want to able to switch in and out of a vehicle a little bit quicker,” he said.

Also, the potential hassle of vehicle ownership, such as maintenance costs and up-keep, may be pushing more consumers towards the leasing market.

“People like the idea of the short-term nature of leasing. In almost all cases, the vehicle will be under factory warranty and will also include a maintenance plan, so people like the idea of having a fixed monthly expense and not having any surprises if you will to worry about,” Hall concluded.

For more on current leasing trends, see the Auto Remarketing story here.
 

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