In late 2008 and early 2009, many pundits said that auto leasing was dead. Well, as pundits often are, they were wrong. Car leasing is a vibrant part of today’s market. What’s more, LeaseTrader.com, a website that makes its living tracking leasing trends, forecasts that leasing will double by 2020. Today leasing represents about 22 percent of overall new light-vehicle sales. LeaseTrader.com predicts it will average around 42 percent across most vehicle brands and segments in 2020.
With the financial crisis of 2008, leasing tumbled because availability of financing essentially froze. In 2009, leasing represented just 9 percent of overall car and light truck sales, but it bounced back in 2010 when credit markets stabilized and automakers began to use leasing as a way to put cars on sale. The effort will accelerate in the next decade, says LeaseTrader.com.
“Drivers today have a much higher interest in leasing because of the way it fits their changing lifestyles,” says Sergio Stiberman, CEO and founder of LeaseTrader.com. “A growing number of people are more interested in leasing because they want a low monthly payment and the ability to change cars every three years -- or sooner.”
His company projects vehicle leasing across all brands and segments will grow in the next 10 years because the process of leasing a vehicle has become more flexible and convenient. Drivers today have the ability to get much shorter terms compared with what they received five or 10 years ago, and now consumers can even comparison-shop for a new lease online, settling into a payment plan that best fits their financial situation. Demand for 12-month leases on LeaseTrader.com has exploded this year (up 16.4 percent this year versus last), reflecting growing consumer sentiment that shorter leasing programs are here to stay.
“We believe car shoppers in the near future will be able to completely customize a leasing program, including mileage and length of terms, in a way that fits their lifestyle and budget,” says Stiberman. “And LeaseTrader.com’s lease transfer marketplace will be even more central to the lease process, allowing for transfers in and out of that contract when they want or need.”
