Trends in Auto Leasing

The most recent LTR/8+ published by CNW Marketing/Research provides useful data on residual losses on personal-use leases during the first half of this year vs. the full year, 2000. During the first half of this year, the shortfall of actual residual values below the projected values was 12.3 percent. The unweighted average loss rose from $1,402 per off-lease vehicle to $1,575. As noted in earlier issues of Spotlight on Finance, the largest residual losses have been on SUVs. Residual losses per unit on compact SUVs rose 24 percent to $2,425, while such losses on luxury SUVs grew 27 percent to $1,750.

The publication also provides data on the frequency of leasing of cars and light trucks by origin and brand. For the first half of 2001, total industry sales were 8,710,079, of which car and "truck" (SUV) sales were almost evenly divided. Personal-use leases accounted for 28.4 percent of the total volume: 26.4 percent of industry car sales and 30.7 percent of industry truck sales. (At its peak, leasing accounted for about 36 percent of industry sales.) During the first half of the year, personal-use leases accounted for 28.0 percent of the total sales of domestic (U.S) cars and trucks—23.4 percent of domestic car sales and 31.3 percent of domestic truck sales. In contrast, 43.0 percent of European cars and trucks and 28.4 percent of Asian cars and trucks were financed with leases.