Vehicle leasing to see a surge through 2015
ALG, the auto industry benchmark for residual values and depreciation data, says there will be a significant resurgence in the automobile leasing market in 2011 that will continue through 2015. The luxury market is predicted to lead the charge with a lease penetration rate of nearly 43 percent by 2012, while lease penetration in the mainstream market will increase to 17.5 percent over the next two years.
ALG says numerous brands will capitalize on this leasing resurgence, based on current high residual values, which allows them to offer highly competitive monthly lease payments. The luxury brands with the highest residual values ranked from one to five are: 1. Land Rover, 2. Infiniti, 3. Acura, 4. Audi and 5. Lexus. The mainstream brands with the highest residual values ranked from one to five are: 1. Mini, 2. Subaru, 3. Mazda, 4. Honda and 5. Hyundai.
Among luxury brands Land Rover is expected to see the biggest gain in leasing, while Hyundai should see the biggest gains in the mainstream market. ALG also said that the residual gap between brands continues to shrink, indicating an increasingly more competitive leasing landscape for both the luxury and mainstream markets.
“What we expect to see for the next several years is a very positive environment for leasing due to low used vehicle supply resulting in stronger used vehicle values, historically low interest rates and an easing of credit requirements as the overall economic recovery begins to take hold,” said Eric Lyman, director, Residual Value Solutions for ALG. “As a result, leasing is emerging as an excellent option for dealers looking to move inventory and for buyers eager to get into new vehicles at competitive prices.”
ALG publishes the “Automotive Lease Guide” the industry standard for residual value projections in North America, and has been forecasting automotive residual values for over 45 years in both the U.S. and Canadian markets