NADA: Leasing Driving New-Vehicle Deliveries
Lease registrations have improved by an annual average of 18% since 2011, according to the NADA’s most recent installment of its Used Car Guide Perspective report.
MCLEAN, Va. — Leasing is leading the charge when it comes to new-vehicle deliveries, according to the National Automobile Dealers Association’s February installment of its Used Car Guide Perspective report.
According to the publication, which relies on data from IHS Automotive, the recovery in new deliveries has been spearheaded by exceptional growth in consumer leases — with personal lease registrations improving by an annual average of about 18% since 2011, while personal loans grew by 8%. And in 2013, leases soared by 31%.
Additionally, leasing comprised approximately 25% of new vehicle deliveries to consumers in 2014 — just a few points shy of 1997’s all-time high share of 27.6%, according to the NADA.
“We estimate that personal lease volume improved by approximately 9% to 3.14 million units in 2014 (commercial leases added another 500,000-plus units), which is the highest figure recorded since 1999’s record high of 3.3 million units,” read the Used Car Guide, in part. “Given the growing appetite for leasing, it’s a safe bet that the number of personal leases booked in 2015 will surpass this figure by landing somewhere in the 3.3 to 3.4 million range.”
Due to the recovery in new vehicle sales, more used vehicles will become available. And the rapid rise in leasing combined with the program’s shorter holding cycle means that volume growth for younger models will rise more dramatically than it will for older vehicles.
The trend has the NADA estimating late-model supply will grow by more than 900,000 units to 11.97 million in 2015 ― an increase of more than 8%. Meanwhile, off-lease volume is expected to increase by 20% to 2.35 million, while retail supply is forecast to jump by 7%, reaching 6.94 million units.
The association believes late model supply will rise by an additional 1 million-plus units per year in both 2016 and 2017, to reach 14.1 million units by the end of the period. This would place supply within striking distance of 2007’s 14.6 million units.
“Viewed another way, it will have taken more than 10 years for late model supply to approach pre-recession levels,” the association continued.
“Overall, we estimate that late model retail supply will grow 25% ― about 1.6 million units ― from 2014 to 2017. Off-lease supply will be up more than 67%, which is equivalent to about 1.3 million vehicles. Totals for each are forecast to reach 8.1 and 3.3 million, respectively.”
As for older model supply, the NADA expects that the Great Recession’s legacy will continue to push volume lower on a like-age basis for a few more years. Supply for the group is unlikely to rise until 2019, and it will be even longer before the volume returns to pre-recession levels, according to the association.
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