Hike in maturing auto leases

The number of leases set to mature next year is likely to be significantly higher than previous trends, sparking concerns about the impact on trade-in values, according to a presentation at the recent Automotive Forum hosted by the National Automobile Dealer Association and J. D. Power.

John Humphrey, senior vice president and general manager of global automotive operations at market research specialists J.D. Power said predictions suggest there will be about 3.1 million lease maturities in 2016.

This compares with the 2.2 million lease maturities in 2014 and the 2.3 million expected this year.

“Right now, we see used-vehicle prices remain relatively stable. They’re at pretty high levels,” Humphrey said. “But if we see an increase in the amount of vehicles coming off lease, that’s something we would want to watch. We want to see what happens with trade-in values and then the corollary with new-vehicle sales.”

Humphrey reported leasing, along with long-term financing, has hit record levels, up from a penetration level of 13% in 2009 to 26% last year, while for the year-to-date in 2015, it is at 28%.