NADA UCG Study Explores Role of Leasing in New and Used Vehicle Sales

Jonathan Banks
Exec­u­tive Auto­mo­tive Ana­lyst
NADA Used Car Guide

Lease pen­e­tra­tion has grown sub­stan­tial­ly – from 25.7% in 2014 and up near­ly 2 per­cent­age points more so far this year to 27.8%, on pace to top 1997’s all-time high of 27.4%. A dras­ti­cal­ly reduced sup­ply of used vehi­cles from strong demand and a drop in sales dur­ing the reces­sion helped boost used vehi­cle prices. There’s been a wide gap in retained val­ue over that time – in 2007, aver­aged retained val­ue for 3-year-old units, typ­i­cal­ly off-lease vehi­cles, stood at approx­i­mate­ly 45% of equipped new vehi­cle prices. In 2014, 3-year-old reten­tion hit 54.4%.

Read all about New Vehi­cle Leas­ing: Facts, Fig­ures and Future Con­sid­er­a­tions

Num­ber of New Retail Leas­es Orig­i­nat­ing in 2010 Reached 1.75M Units:
Hit 3.48M in 2014, dou­bling four years ear­li­er and sur­pass­ing pre­vi­ous high in 1999.

J.D. Pow­er Esti­mates Off-Lease Will Grow by 4% to a Total of 2.3M Units:
Off-lease vol­ume this year will pale in com­par­i­son to 2015 with 800K units matur­ing.

Expand­ing Used Sup­ply Spear­head­ed by Off-Lease will Com­press UC Prices:
Effect will be most pro­nounced on sub­com­pact and com­pact cars, and by both non-lux­u­ry and lux­u­ry com­pact and mid­size util­i­ties.

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