Leasing rates rose in the second quarter of 2018 with SUVs accounting for the largest portion of those leases.
Though auto sales were down overall in the second quarter of 2018, folks leasing instead of buying new vehicles were doing their level best to keep sales numbers high despite lower incentives, according to a new study.
Swapalease.com notes the average months remaining in leases rose during the second quarter to 28.8 months compared with 25.1 months in the first quarter. The rise is an indication that people were looking to get out of their leases early in search of a better vehicle or deal.
Not only was that measure up, the average miles remaining fell from 23,115 to 22,617 left in their contract, which is only a slight decrease. The ratio of months remaining to miles remaining, according to the website, is an indicator that people are driving more. Those looking to get out leases early could have been creeping up on their contract limit, forcing them to make a move earlier.
The average incentive offered to escape an existing lease fell slightly to $601.91 from $612.54, which is reflective of the rise of search traffic and the increased demand for lease takeover. The average lease payment on the road in the second quarter was registered at $487.51 per month, down from $495.83 in the first quarter.
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“As the trends show, leasing remains popular as an alternate form of finance, and shoppers will continue to seek the right deal that fits their automotive needs whether that’s on the showroom floor or through the secondary market where there is greater term flexibility,” said Scot Hall, executive vice president of Swapalease.com.
Swapalease.com visitors were looking for SUVs more than any other type of vehicle during the second quarter.
Not surprisingly, most people continue to lease an SUV (23.7%), up noticeably from 19.5% during the first quarter. Conversely, midsize car drivers fell to 12.3% from 13.3%, as well as sports car drivers at 4.7%, down from 7.7%.
What’s more, even though popular truck models are some of today’s best-selling vehicles at the dealership, only 3.5% of people say they’re leasing one, down from 4.2% in the first quarter. That may seem to contradict sales data showing truck sales on the rise. However, trucks are purchased rather than leased because they are used as work vehicles.
(Click Here for the story about Chevy enticing large SUV buyers with big V8s.)
Swapalease connects people looking to get out of leases with those looking for an inexpensive way to get into a vehicle. The site notes that sellers are finding more buying activity on the site and are less likely to offer a hefty incentive to escape their contract.
Leasing rates are higher for foreign vehicles than domestic.
Other important bits of info include: 68% of prospective leasers are looking at foreign vehicles and 50% will go to another brand and another 34% aren’t certain what they’re looking for yet. The brand with highest average monthly payment is Mercedes-Benz at $812.08 with the cheapest being Hyundai at $330.60.
BMW continues to lead all brands in total overall share of traffic on Swapalease.com, with 11% share of traffic. Mercedes-Benz is next with 8%, followed by Audi at 3%.
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Lexus, which saw its search traffic fall significantly from the previous quarter, also saw its total overall share of traffic on the site fall to 2%, down from 3% the previous quarter. Several brands continue to see total overall search traffic less than 1%, such as Chrysler, Ram and Nissan.