{"id":151419,"date":"2024-12-20T08:07:39","date_gmt":"2024-12-20T08:07:39","guid":{"rendered":"http:\/\/www.spglobal.com\/mobility\/en\/research-analysis\/auto-lease-returns-projected-to-drop-in-2025.html"},"modified":"2024-12-20T08:07:39","modified_gmt":"2024-12-20T08:07:39","slug":"auto-lease-returns-projected-to-drop-in-2025-what-oems-dealers-and-lenders-need-to-know","status":"publish","type":"post","link":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/2024\/12\/20\/auto-lease-returns-projected-to-drop-in-2025-what-oems-dealers-and-lenders-need-to-know\/","title":{"rendered":"Auto Lease Returns Projected to Drop in 2025: What OEMs, Dealers, and Lenders Need to Know"},"content":{"rendered":"<p ><em>By Julie Knakal, Executive Director, Data and Content<br \/>\nManagement, and Alex Vinatrou, Senior Data Analyst, S&amp;amp;P Global<br \/>\nMobility<\/em><\/p>\n<p >As we approach the first half of 2025 (H1 2025), a seismic shift<br \/>\nis looming over the automotive market. We expect auto lease returns<br \/>\nto plummet compared to the previous year, potentially wiping out a<br \/>\nsignificant number of units from the industry.<\/p>\n<p >The pressure is on for dealers and automotive lenders, but with<br \/>\nthe right strategies, there&#39;s a silver lining. Read on to discover<br \/>\nwhat&#39;s driving these changes, why it matters and how your business<br \/>\ncan turn this challenge into an opportunity.<\/p>\n<h2 ><strong>A Major Drop in Auto Lease Returns: What the Data<br \/>\nShows<\/strong><\/h2>\n<p >In H1 2025, we project lease maturities to fall by 41% compared<br \/>\nto the same period in 2024. This significant decline could<br \/>\ntranslate into a hit of nearly 1 million vehicles to the<br \/>\nindustry.<\/p>\n<p >The premium market will take the hardest hit, with an expected<br \/>\n46% drop in lease returns. We expect mainstream segments to<br \/>\nexperience a decline of 39%. Most major vehicle brands will see<br \/>\ndecreases, but the range is wide\u2014from a modest 11% drop to a<br \/>\nstaggering 81% reduction in lease returns for some major<br \/>\nplayers.<\/p>\n<p ><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/cdn.ihsmarkit.com\/www\/images\/1224\/lease-returns-2024-to-2025_201220241504447.png\" alt=\"Lease Returns 2024 to 2025\" width=\"700\" height=\"357\" \/><\/p>\n<h2 ><strong>What is Causing the Decline in Projected Auto Lease<br \/>\nReturns?<\/strong><\/h2>\n<p >The reasons behind this shift largely stem from a change in<br \/>\nconsumer behavior in response to the market conditions two to three<br \/>\nyears ago.<\/p>\n<p >There are a few key factors that influenced those decisions:<\/p>\n<ul >\n<li><strong>Inventory shortages and pricing<\/strong>: The primary<br \/>\nlease term driving this decline is 36 months, so we need to<br \/>\nconsider what was happening in 2022. Low inventory in H1 2022<br \/>\npushed OEMs and lenders to reduce their customer and dealer<br \/>\nincentives, with the biggest impact on leases. This contributed to<br \/>\nan average 10% rise in lease payments as a percentage of MSRP from<br \/>\n2019 to 2022. On the other hand, finance payments as a percentage<br \/>\nof MSRP held steady. In part because of this differential,<br \/>\nreturning lessees in H1 2022 who opted to replace their outgoing<br \/>\nleases often chose to finance their new vehicles instead.<\/li>\n<li><strong>Longer loan terms<\/strong>: In H1 2022, the share of<br \/>\nlessees who returned to the new vehicle market and leased a new<br \/>\nvehicle was 64%\u2014an eight percentage-point drop from H1 2020 and<br \/>\nH1 2021. Thirty percent of lessees who returned to the market in H1<br \/>\n2022 financed their new vehicle\u2014up from the typical 24% share.<br \/>\nOf lessees who came out of a 36-month lease and chose to finance<br \/>\ninstead, many opted for longer loan terms: While 22.5% chose a<br \/>\n60-month loan, 45.2% opted for the longer terms of 72-months and<br \/>\n17.6% for 84-month terms.<\/li>\n<\/ul>\n<h2 ><strong>Steps the Industry Can Take to Encourage Leasing<br \/>\nin<\/strong><strong>H1 2025<\/strong><\/h2>\n<p >The challenge in H1 2025 remains: how do we get consumers to<br \/>\nswitch back to leasing? The good news is that the industry has<br \/>\nlevers to pull, and lease payments as a percentage of MSRP dropped<br \/>\nin 2024.<\/p>\n<ul >\n<li><strong>Adjust incentives<\/strong>: OEMs and lenders will need<br \/>\nto get creative to encourage returning lessees to opt for leases<br \/>\nagain. Increasing incentives, particularly in the premium segment,<br \/>\nwill be key to making leases more appealing as the market<br \/>\nshifts.<\/li>\n<li><strong>Target specific states<\/strong>: More than 50% of<br \/>\nprojected lease maturities are concentrated in just five states,<br \/>\nranging from a 24% drop in returns in Michigan to a 49% drop in<br \/>\nCalifornia. Tailoring strategies to these states could help dealers<br \/>\nand lenders better manage the decline in lease maturities.<\/li>\n<li><strong>Capture consumers who favor leasing<\/strong>: Many<br \/>\nconsumers prefer to lease because it allows them to drive a new<br \/>\nvehicle every few years, ensuring they stay within warranty and<br \/>\nenjoy the latest technology. Dealers and lenders should target<br \/>\nthese customers to ensure they remain loyal to leasing.<\/li>\n<\/ul>\n<h2 ><strong>Looking Beyond 2025: A Path Toward<br \/>\nStability<\/strong><\/h2>\n<p >Although the challenges of H1 2025 will be significant, there is<br \/>\nlight at the end of the tunnel. By H1 2026, the market should begin<br \/>\nto stabilize, and we should see more meaningful improvement in H1<br \/>\n2027, with growth due to a 21% increase in 36-month lease volume in<br \/>\nH1 2024.<\/p>\n<p >That growth could increase to roughly 30 percent if recent<br \/>\ntrends in lease volume continue, as 24-month leases that go out the<br \/>\ndoor in H1 2025 will begin returning in H1 2027. There is potential<br \/>\nfor additional upside in H1 2027 and H1 2028 if OEMs can<br \/>\nsuccessfully convert customers who have switched to financing back<br \/>\ninto leasing. Even so, we expect total lease maturities in future<br \/>\nyears to remain well below the higher levels seen from 2021 to<br \/>\n2024.<\/p>\n<h2 ><strong>How Dealers and Lenders Can Prepare<\/strong><\/h2>\n<ul >\n<li><strong>Promote lease return programs<\/strong>: To mitigate the<br \/>\nimpact of declining lease returns, dealers and lenders need to<br \/>\nactively promote their lease return programs. This includes<br \/>\nreaching out to consumers before their leases are up and providing<br \/>\nthem with clear incentives to lease again.<\/li>\n<li><strong>Focus on customer education<\/strong>: Many consumers<br \/>\nmay not be fully aware of their equity position or the benefits of<br \/>\nleasing. Dealers should focus on educating their customers about<br \/>\nthe value of leasing and how it aligns with their needs for lower<br \/>\npayments, newer vehicles and warranty coverage.<\/li>\n<li><strong>Leverage data to target potential lessees<\/strong>:<br \/>\nData analytics will be essential to identify lessees who are most<br \/>\nlikely to return to the leasing market. Dealers can use this data<br \/>\nto target their outreach efforts and create tailored offers that<br \/>\nappeal to these potential customers.<\/li>\n<li><strong>Offer creative financing and leasing options<\/strong>:<br \/>\nAs vehicle prices remain high, offering flexible financing and<br \/>\nleasing options could be crucial to convince consumers to stick<br \/>\nwith or return to leasing. Programs that make payments more<br \/>\nmanageable, like deferred payments or trade-in programs, will be<br \/>\nessential.<\/li>\n<\/ul>\n<h2 ><strong>Conclusion<\/strong><\/h2>\n<p >The first half of 2025 presents not only a significant challenge<br \/>\nfor car dealers and automotive lenders but also an opportunity to<br \/>\nadapt to changing consumer behavior. By understanding the factors<br \/>\ndriving the decline in lease returns and taking proactive steps to<br \/>\nattract lessees back to the market, dealerships and lenders can<br \/>\nposition themselves for success as the market begins its recovery<br \/>\nin the coming years.<\/p>\n<p ><em>AutoCreditInsight &#8211; offered in partnership with TransUnion &#8211;<br \/>\nprovides clients<\/em><em>24\/7 access to vehicle registrations and<br \/>\nreturn-to-market volumes by month with depersonalized loan and<br \/>\ncredit information.<\/em><\/p>\n<p ><a class=\"primary-button\" href=\"https:\/\/www.spglobal.com\/mobility\/en\/products\/autocreditinsight.html\"><br \/>\nLearn More About AutoCreditInsight<\/a><\/p>\n<p ><em>Market Scan provides<\/em><em>OEMs with fast, competitive<br \/>\npayment analysis across vehicles, helping you to optimize your<br \/>\nincentives and sales strategies to match your competition.<\/em><\/p>\n<p ><a class=\"primary-button\" href=\"https:\/\/www.marketscan.com\/automotive-payment-analytics\/\">Request<br \/>\na Demo for mScope<\/a><\/p>\n\n<h2><b>Commercials Cooperation Advertisements:<\/b><\/h2>\r\n<p><br>(1) IT Teacher IT Freelance<br> <\/p>\r\n<a href=https:\/\/itteacheritfreelance.hk\/wordpress><img src=http:\/\/gamefootballmobileanimeiphone.com\/wp-content\/uploads\/2023\/09\/ITTeacherITFreelance-Website.png alt=IT\u96fb\u8166\u88dc\u7fd2 java\u88dc\u7fd2 \u70ba\u5927\u5bb6\u914d\u5c0d\u96fb\u8166\u88dc\u7fd2,IT freelance, \u79c1\u4eba\u8001\u5e2b, PHP\u88dc\u7fd2,CSS\u88dc\u7fd2,XML,Java\u88dc\u7fd2,MySQL\u88dc\u7fd2,graphic design\u88dc\u7fd2,\u4e2d\u5c0f\u5b78ICT\u88dc\u7fd2,\u4e00\u5c0d\u4e00\u79c1\u4eba\u88dc\u7fd2\u548cFreelance\u81ea\u7531\u5de5\u4f5c\u914d\u5c0d\u3002\/><\/a><p><a href=https:\/\/itteacheritfreelance.hk\/wordpress\/index.php\/findteacher>\u7acb\u523b\u8a3b\u518a\u53ca\u5831\u540d\u96fb\u8166\u88dc\u7fd2\u8ab2\u7a0b\u5427! <\/a><br>\r\n\r\n\u7535\u5b50\u8ba1\u7b97\u673a -\u6559\u80b2 -IT \u96fb\u8166\u73ed\u201d ( IT\u96fb\u8166\u88dc\u7fd2 ) \u63d0\u4f9b\u4e00\u500b\u65b9\u4fbf\u7684\u7535\u5b50\u8ba1\u7b97\u673a \u6559\u80b2\u5e73\u53f0, \u70ba\u5927\u5bb6\u914d\u5c0d\u4fe1\u606f\u6280\u672f, \u96fb\u8166 \u8001\u5e2b, IT freelance \u548c programming expert. \u8b93\u5927\u5bb6\u65b9\u4fbf\u5730\u5c31\u80fd\u627e\u5230\u5408\u9069\u7684\u96fb\u8166\u88dc\u7fd2, \u96fb\u8166\u73ed, \u5bb6\u6559, \u79c1\u4eba\u8001\u5e2b.  <br>\r\n\r\nWe are a education and information platform which you can find a IT private tutorial teacher or freelance. <br>\r\n\r\nAlso we provide different information about information technology, Computer, programming, mobile, Android, apple, game, movie, anime, animation\u2026 \r\n<\/p>\n<p><br>(2) ITSec<br> <\/p><a href=https:\/\/itsec.vip><img src=http:\/\/gamefootballmobileanimeiphone.com\/wp-content\/uploads\/2023\/09\/ITSec-Main-Promotion-Image.png alt= https:\/\/itsec.vip\/\r\nSecure Your Computers from Cyber Threats and mitigate risks with professional services to defend Hackers.  \r\nITSec provide IT Security and Compliance Services, including IT Compliance Services, Risk Assessment, IT Audit, Security Assessment and Audit, ISO 27001 Consulting and Certification, GDPR Compliance Services, Privacy Impact Assessment (PIA), Penetration test, Ethical Hacking, Vulnerabilities scan, IT Consulting, Data Privacy Consulting, Data Protection Services, Information Security Consulting, Cyber Security Consulting, Network Security Audit, Security Awareness Training.\/><\/a> \r\n<br><br> \r\n<p><a href=https:\/\/itsec.vip>www.ITSec.vip<\/a> <br> <br> \r\n<p><a href=https:\/\/sraa.com.hk>www.Sraa.com.hk<\/a> <br> <br> \r\n<p><a href=https:\/\/itsec.hk>www.ITSec.hk<\/a> <br> <br> \r\n<p><a href=https:\/\/penetrationtest.hk>www.Penetrationtest.hk<\/a> <br> <br> \r\n<p><a href=https:\/\/itseceu.uk>www.ITSeceu.uk<\/a> <br> <br> \r\nSecure Your Computers from Cyber Threats and mitigate risks with professional services to defend Hackers. <br><br>\r\nITSec provide IT Security and Compliance Services, including IT Compliance Services, Risk Assessment, IT Audit, Security Assessment and Audit, ISO 27001 Consulting and Certification, GDPR Compliance Services, Privacy Impact Assessment (PIA), Penetration test, Ethical Hacking, Vulnerabilities scan, IT Consulting, Data Privacy Consulting, Data Protection Services, Information Security Consulting, Cyber Security Consulting, Network Security Audit, Security Awareness Training. \r\n<br><br>Contact us right away. <br><br>Email (Prefer using email to contact us): <br>SalesExecutive@ITSec.vip<\/p>","protected":false},"excerpt":{"rendered":"<p>By Julie Knakal, Executive Director, Data and Content<br \/>\nManagement, and Alex Vinatrou, Senior Data Analyst, S&amp;amp;P Global<br \/>\nMobilityAs we approach the first half of 2025 (H1 2025), a seismic shift<br \/>\nis looming over the automotive market. We expect auto 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