CINCINNATI and SCHAUMBURG, Ill. –
If consumers aren’t securing a lease from a franchised dealership as much because of the coronavirus pandemic, they might be using alternatives to land a vehicle lease, based on the newest information from Experian and Swapalease.com.
Experian’s latest State of the Automotive Finance Market Report showed a decrease in leasing year-over-year, with 24% of new vehicles being leased in April, compared to 30% in April of last year.
Meanwhile, Swapalease.com reported vehicle lease credit applicants on its site registered an approval rate of 68.6% in May, a significant increase from the April rate of 63.8%. Site officials explained the increase is likely related to an influx of online shoppers who are seeking alternative means of vehicle acquisition during COVID-19.
“Shoppers continue to seek out online marketplaces in lieu of dealership visits,” Swapalease.com said.
Secondary markets such as Swapalease.com can provide automotive shoppers with feasible alternative solutions that fit their current lifestyle, which may be altered by shelter in place or work from home arrangements.
Despite unusual circumstances lease credit approval rates have remained stable when compared to data from the month of May in 2019 and 2018. In 2019, 72.4% of applications looking to take over someone else’s lease were approved. In May of 2018, only 67.9% of applicants were approved.
“We’re seeing a significant shift in the way consumers are shopping for their next vehicle and an increase in shoppers who are seeking shorter-term financial commitments with lower monthly payments,” Swapalease.com executive vice president Scot Hall said.
“Alternative marketplaces like Swapalease.com may be more appealing to individuals who find themselves temporarily in a more challenging financial situation,” Hall continued.
Perhaps compounding the financial situation is the rise in monthly payments for leases. Experian discovered that the average monthly payment for a lease booked during the first quarter came in at $466, a rise of $9 year-over-year. The average lease term remained nearly stable at 36.76 months, according to the newest update.
As far as the vehicles being leased, Experian also shared the Top 10 models with the most market share in Q1. The list included:
1. Honda Civic: 3.5%
2. Honda CR-V: 2.8%
3. Chevrolet Equinox: 2.6%
4. Toyota RAV4: 2.6%
5. RAM 1500: 2.5%
6. Jeep Grand Cherokee: 2.3%
7. Ford Explorer: 1.8%
8. Toyota Corolla: 1.8%
9. Honda Accord: 1.8%
10. Nissan Rogue: 1.7%