With more lower-credit buyers in the market, greater access to 72-month financing terms and a decrease in the market share commanded by luxury buyers, the industry’s lease penetration rate slowed down slightly in March, according to J.D. Power and Associates senior director Thomas King.
That said, the leasing rate (which came in at 19.7 percent) managed to stay near the 20-percent ballpark for the month. It was down from a 21.1-percent rate in March 2011 and 20.7 percent in February, J.D. Power’s data indicated.
The real attention-grabber, King suggested to Auto Remarketing, was what J.D. Power discovered about long-term (72 months or more) financing. The firm noted that around 30 percent of all retail sales last month included 72 long-term financing, which marks the highest percentage the firm has observed, King added.
As for leasing, “There was some movement, but there weren’t any exceptional trends,” he noted.
Breaking the leasing market down by segment, the only vehicle category where leasing penetration climbed from February was the subcompact segment, which jumped 8 percent, coming in at 7 percent for March.
Two segments were up on a year-over-year basis: the midsize utility class, which was up 8 percent as its penetration reached 26 percent; and the large conventional segment, which was up 1 percent as it hit 19-percent penetration.
The vehicle category to show the biggest downward change in lease penetration rate (on both a year-over-year and month-over-month basis) was the large pick-up class. Coming in at 4 percent for the month, large pickups were off 10 percent from February and 19 percent year-over-year.
“Several manufacturers offered attractive extended term financing packages than helped switch buyers from lease to financing,” King said of pickups.
In fact, J.D. Power’s data indicates that long-term financing penetration for this segment was up 18 percent month-over-month and climbed 17 percent year-over-year.