Leasing Boom Means Overvaluing Residuals and Growing CPO Sales

Art Spinel­la
CNW Research

CNW Research says that the boom in new vehi­cle leas­ing is caus­ing automak­ers to over­val­ue future resid­ual val­ues 5% to 10% to get month­ly pay­ments low­er and beat out the com­pe­ti­tion; Deal­ers and OEMs will still see some gains from leas­ing boom – cer­ti­fied pre-owned (CPO) vehi­cles are com­ing from cer­ti­fi­able used cars at end of term; CPOs are the most desired UVs on mar­ket and are see­ing sales grow dra­mat­i­cal­ly.

Here’s the lat­est Retail Auto­mo­tive Sum­ma­ry mar­ket report

Tepid UV Sales Vol­ume in Octo­ber Par­tial­ly Comes from Fed Shut­down:
Near­ly 500K fed-owned vehi­cles were slat­ed for sale but post­poned until re-open­ing.

Pri­vate-Par­ty Sales Doing Very Well with 18% Vol­ume Gain this Month:
Fran­chised deal­ers see­ing slight gain at 0.4% and Inde­pen­dents down 7.7%.

Sep­tem­ber Saw Near­ly 107K UVs Leased – 4.5% Over Year Ago:
Typ­i­cal used vehi­cle lease is near-lux­u­ry and lux­u­ry seg­ments includ­ing high-end SUVs.



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