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Falling Used Car Prices? Don’t Blame Leasing

There’s been a lot of discussion recently on the role leasing has been playing on used car prices, with particular emphasis on the rising number of lease returns expected this year and in years to come.

Scot Hall from Swapalease.com believes leasing is playing less of a role on the reasons why prices are headed down. Consider the following points:

  • Roughly 2.1 million lease returns are expected in 2014 (per Manheim)
  • However, between 8-9 million trade-ins overall are expected in 2014 (per industry average)
  • Leasing will account for just 22.5% of vehicles coming back into dealerships in 2014
  • Lease return vehicles (3 yr old) are actually helping to fuel the CPO recovery

“It’s easy to point a finger at leasing when it comes to falling car prices simply because there has been a great resurgence in lease deals since the recession,” said Scot Hall, Executive Vice President of Swapalease.com. “However, when you go from 10 million SAAR to 16 million SAAR, there’s a great resurgence all around, not just leasing. It’s difficult to congratulate leasing in helping you get to 16 million SAAR and then also say it’s hurting the industry by forcing falling auto prices.”

Views: 210

Tags: autos, car, cars, lease, leasing, shopping, transfer

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Comment by Big Tom LaPointe on November 10, 2014 at 9:12pm

The simple math is that a relative shortage of pre-owned vehicles in the 2009-2011 model year range from greatly-reduced sales and corporate restructuring kept prices inflated. Now that sales have rebounded, pre-owned vehicles should be back on a traditional depreciation curve.

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