Leases Losing Allure?

Just like most of us between high school and now, the popularity of vehicle leasing has changed.

• As of July 2022, vehicle leasing had dropped 40% below January 2020.
• Of leaseholders between July 2021 and June 2022, only about 25% leased again.
• In the same period, 26% of leases were terminated at least 6 months earlier than the set end date. A 63% increase in early bailers compared to 2019.

Why?

• The average monthly lease payment hit $661 in December 2022, which is 33% higher than in March 2020.
• Recent inventory issues have more customers looking for long-term ownership to avoid a 2-3 year lease cycle.
• Finally, the increased value of used cars makes people more willing to spend money on maintaining a car into the 12+ year average ownership we've seen lately.

The shift has led to higher prices and less inventory in the used market.