Chip shortages driving down new vehicle production sends ripples through the entire automotive industry and adjacent industries. Price increases caused by inventory shortages have negatively impacted consumer interest in vehicle leasing. Leases account for 19% of overall auto retail for 2022, down from 30% in the years before the pandemic.
Cause and effect. In addition to fewer vehicle leases, customers are downgrading their mile allotment. As vehicle lessors adjust prices to address dropping ROI, what was once a cheaper alternative to buying has become a more expensive monthly payment. There are much fewer leased cars than once reentered the market as used car inventory, which is also contributing to increased pricing in the used market.