Swapalease.com's Auto Lease Trends Report 1st Quarter 2019 publication is out and shows some interesting movement in the auto leasing industry. It's also a great look into U.S. consumer spending confidence. The report found that the average lease payment was $518.47 per month during the 1st quarter. That's down from $519.14 in the 4th quarter.
Based on miles and months remaining, the report shows that people want to get out of their leases early. This seems due to a desire to change the vehicle brand or type along with changes in income. Luxury brands such as BMW and Mercedes-Benz currently dominate the leasing market. SUVs are the clear leader in car types at 24.6%, which is near double the runner-up - mid-size cars coming in at 14.8%.
Consumer confidence in the economy and continued leasing breaks down into the following categories:
- Overall Confidence in the Economy
- 53 - 2018 Q4
- 54 - 2019 Q1
- Confidence in Economy Looking Ahead
- 37 - 2018 Q4
- 42 - 2019 Q1
- Confidence Level in Leasing A Vehicle Today
- 50 - 2018 Q4
- 56 - 2019 Q1
- Confidence in Leasing Versus a Year Ago
- 44 - 2018 Q4
- 50 - 2019 Q1
At least in Q1 2019, consumers were confident in the economy, had discretionary income, and were willing to spend it.
Despite leasing doing well, overall car sales are a different story. During the 1st half of this year, auto sales declined by 2%, generating the second year-over-year decline in sales in over ten years. Due to the saturation of used cars, lease financing may be the beneficiary.
“Automakers are fighting a war on multiple fronts right now,” said Jeremy Acevedo, manager of industry analysis for Edmunds. “Old cars are piling up on dealer lots, a glut of affordable off-lease vehicles are luring shoppers into the used market, and even with the Fed set to lower rates in July, higher interest rates are here to stay.”