Collateral Data, Residual Forecasting, & Depreciation Trends Can Spot Used Lease Potential
LAWRENCEVILLE, GA (September 13, 2016) – As auto lease levels continue to reach new highs, auto lenders will continue to ponder the prospects of re-leasing some of the off-lease inventory expected back in the next few years. How can lenders identify which vehicles will make good candidates for a used-lease program? Black Book unveils its latest white paper, “How To Grow A Profitable Used Leasing Portfolio”, available for download by clicking here.
Black Book, a division of Hearst Business Media that provides new- and used-vehicle valuation services and custom data licensing solutions, authored the white paper to address growing conversation and questions regarding the prospects of used leasing activity. According to the paper, not all vehicles depreciate alike, and with fluctuating residual forecasts across all segments it’s imperative that lenders and industry professionals rely on collateral data to identify the right vehicles for a used lease portfolio.
The white paper offers specific data examples that address certain scenarios:
- Where used leasing would not make sense: A comparison of a new vehicle finance environment against the same vehicle after 36 months; with data showing how the monthly payments offered would not differ greatly based on a number of criteria.
- Where used leasing would make sense: A similar comparison of a new vehicle with its counterpart at 36 months of age; this time factors such as mileage and a residual without subvention show where the monthly payment would show a noticeable difference.
- How to leverage residual data to find used lease candidates: An explanation into residual forecasting and depreciation trends that can lead to the identification of optimal used lease opportunities based on collateral insight.
“As the off-lease inventory of three- and four-year-old vehicles continues to increase this year and over the next few years, lenders, dealers and remarketers will need to find alternative channels to return these vehicles out into the market,” said Anil Goyal, Senior Vice President of Automotive Valuation and Analytics for Black Book. “Used leasing may be the right choice for some of these vehicles, but the wrong decision can be detrimental to the profit margins of a portfolio, which is why collateral data can mitigate any vehicle profit risk.”
Click here to download the white paper, “How To Grow A Profitable Used Leasing Portfolio”.
About Black Book
Black Book® is best known in the automotive industry for providing timely, independent and accurate vehicle pricing information, and is available to industry-qualified users through online subscription products, mobile applications and licensing agreements. A leading provider since 1955, Black Book has continuously evolved to ensure that it achieves its goal of delivering mission-critical information to its customers, along with the insight necessary to successfully buy, sell, and lend. Black Book data is published daily by National Auto Research, a division of Hearst Business media, and the company maintains offices in Georgia, Florida, and Maryland as well as the Canadian Black Book in Toronto. For more information, please visit BlackBook.com or call 800.554.1026.
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