According to Ricky Beggs, Managing Editor of Black Book, the credit freeze, recession and domestic carmakers’ reorganization all forced a big drop in the number of leases written in 2008-09. Chrysler stopped leasing altogether for a period, and both Ford and GM slowed lease activity significantly before picking back up in early 2010. How will the return of off-lease inventory impact used-car prices and the broader automotive industry?
- Come January, the rate of off-lease vehicle returns will start to build again, bringing more inventory into the CPO and used vehicle market. The majority of this additional off-lease inventory is projected to come from domestic models reflecting their re-entrance into the lease pool in 2010.
- Wholesale and used-car supply continues to feel the effects of low lease returns, as dealers and remarketers indicate growing demand for vehicles in the 3-5 year old range.
- Black Book believes this increase in off-lease return activity will create a shift in normal springtime pricing patterns, which typically see a rise in wholesale and used-car pricing activity. The additional off-lease returns will place downward pricing pressures come April, May and June.
“The real question at this time is trying to figure out how many of these drivers coming off leases will realize enough equity in the vehicle to buy out the lease, ultimately keeping that car out of supply,” said Ricky Beggs, Managing Editor of Black Book. “Dealers will be looking to expand their CPO programs as a way to create more of a market for this increased inventory in the coming months.”
About Black Book
In business since 1955, Black Book is a provider of accurate pricing insight, mobile solutions and online vehicle trade-in valuation for the automotive industry. The company offers the industry’s most accurate vehicle valuation insight to dealers, lenders, remarketers and government agencies. Black Book also provides automotive shoppers with instant and accurate credit-score estimates and trade-in appraisals, which provide the highest quality sales leads for dealers. Click here to view Ricky Beggs’ weekly video series offering the latest insight in the auto market http://ow.ly/aHFD6. Follow Ricky on Twitter @BeggsBlackBook (https://twitter.com/