Used, Pre-Owned Leases Grow as Off-Lease Cars Flood Market
CARS.COM — Cars returned after their lease term expires are getting a new lease on life. As leasing occupies a rapidly increasing share of new-car transactions, automakers’ captive lenders are having to figure out what to do with the commensurately growing number of cars being returned when their lease is up. Automotive News reported that lenders are pulling a little-used tool out of their toolbox: leasing of used and certified pre-owned cars.
Related: Used-Car Prices Fall for Third Straight Month, According to Car-Auction Company
According to Automotive News, more than 3 million off-lease vehicles will flood the market this year, up nearly 20 percent versus 2015 with growth expected to continue for years to come. That’s the result of a surge in leasing among new-car transactions to 29 percent in the fourth quarter of last year compared with less than one in four new cars just two years earlier, the trade journal reported.
“Leasing has been fairly rare in the used-vehicle market, but its share is growing,” Automotive News stated. “In the fourth quarter of 2015, 3.8 percent of leases were on used vehicles, edging up from 3.2 percent two years earlier.”
Toyota, BMW and Ally Financial all reportedly are encouraging used and certified leasing, with Infiniti considering following suit. Toyota, Lexus and Scion, for example, will lease certified pre-owned vehicles for an average of 36 months; Toyotas and Scions must be no more than three model years old and have less than 65,000 miles on them, while Lexus cars must be no more than four years old with less than 60,000 miles.
Get the full story at Automotive News, (subscription required), here.
