{"id":40937,"date":"2023-01-22T12:03:42","date_gmt":"2023-01-22T17:03:42","guid":{"rendered":"https:\/\/autosector.com\/?p=40937"},"modified":"2023-01-22T12:03:42","modified_gmt":"2023-01-22T17:03:42","slug":"people-aren-t-leasing-cars-anymore-and-it-means-higher-prices-and-worse-choices-for-used-car-buyers","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=40937","title":{"rendered":"People aren&#8217;t leasing cars anymore \u2014 and it means higher prices and worse choices for used car-buyers &#8211; Autoblog"},"content":{"rendered":"<p><em><span style=\"font-size: 8pt;\">Vehicle leases made up 31% of the auto market in January 2020, and just 17% in July 2022. <span class=\"copyright\">Kekyalyaynen \/ Shutterstock.com<\/span><\/span><\/em><\/p>\n<ul class=\"summary-list\">\n<li><strong>Vehicle leasing was down almost 50% last July, compared to January 2020.<\/strong><\/li>\n<li><strong>Rising lease costs and changing buying habits are driving the change.<\/strong><\/li>\n<li><strong>That means less supply going to the used vehicle market, keeping prices up and inventory low.<\/strong><\/li>\n<\/ul>\n<p>US car-buyers, it seems, don&#8217;t want to <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/tag\/leasing\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:0;\">lease<\/a> vehicles anymore.<\/p>\n<p>Leases made up 31% of the auto market in January 2020, and just 17% last July, according to a new auto study from consumer credit reporting agency TransUnion.<\/p>\n<p>Of 3.8 million consumers who ended a vehicle lease between July 2021 and June 2022, only 25% of consumers chose to lease again, according to TransUnion. That&#8217;s\u00a0a 40% decline from January 2020.\u00a0<\/p>\n<p>Instead, these drivers opted to finance a <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/research\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:1;\">new car<\/a> purchase or purchase a vehicle without financing, even though the former meant an increase in their monthly payment.\u00a0<\/p>\n<p>Moreover, in that same period, about 26% of consumers ended their lease six or more months prior to the expected lease-end date, up 63% since 2019.<\/p>\n<h2>Why people aren&#8217;t leasing cars anymore<\/h2>\n<p>This is happening for a couple of reasons. For one, leasing is getting more and more expensive. The <a href=\"https:\/\/www.coxautoinc.com\/wp-content\/uploads\/2023\/01\/Jan-12-2023-Cox-Automotive-Industry-Insights-and-Forecast-Call-Presentation.pdf\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:2;\">average lease payment hit $661 in December 2022<\/a>, up 33% from March 2020, according to Cox Automotive.<\/p>\n<p>Inventory constraints played a role in this decline, per TransUnion. Shoppers don&#8217;t want to keep going back into the market to look for another vehicle every two to three years, especially given the <a href=\"https:\/\/www.businessinsider.com\/car-dealerships-shopping-inventory-prices-incentives-2023-1?utm_medium=referral&amp;utm_source=yahoo.com\" target=\"_blank\" rel=\"noopener noreferrer\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:3;\">inventory challenges<\/a> seen at <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/car-dealers\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:4;\">dealerships<\/a> <a href=\"https:\/\/www.businessinsider.com\/new-car-prices-hit-record-high-december-2022-12?utm_medium=referral&amp;utm_source=yahoo.com\" target=\"_blank\" rel=\"noopener noreferrer\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:5;\">throughout the pandemic<\/a>.\u00a0<\/p>\n<p>Car-owners, in general, are also <a href=\"https:\/\/www.businessinsider.com\/used-car-prices-americans-keep-cars-longer-than-ever-before-2021-6?utm_medium=referral&amp;utm_source=yahoo.com\" target=\"_blank\" rel=\"noopener noreferrer\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:6;\">holding onto their cars for longer<\/a>.\u00a0S&amp;P Global Mobility found the <a href=\"https:\/\/www.spglobal.com\/mobility\/en\/research-analysis\/average-age-of-vehicles-in-the-us-increases-to-122-years.html#:~:text=TIPNet-,Average%20Age%20of%20Vehicles%20in%20the%20US%20Increases%20to%2012.2,according%20to%20S%26P%20Global%20Mobility&amp;text=The%20average%20age%20of%20light,passenger%20cars%20and%20light%20trucks.\" target=\"_blank\" rel=\"noopener noreferrer\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:7;\">average age of a vehicle was 12.2 years<\/a> in 2022. Much of that has also been driven by the <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/tag\/chip+shortage\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:8;\">chip shortage&#8217;s<\/a> impact on the number and type of new and used vehicles that could be bought on <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/car-dealers\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:9;\">dealer<\/a> lots over the past few years.\u00a0<\/p>\n<p>Consumers are also willing to invest more money into maintenance as the value of their vehicles have increased and vehicle quality means a longer expected use life.<\/p>\n<p>&#8220;The vehicle park is now hundreds of billions of dollars more valuable,&#8221; Cox senior economist Charlie Chesbrough said at a recent Federal Reserve Bank of Chicago annual auto insights symposium in Detroit. &#8220;Do I replace that engine? Do I fix that transmission and spend thousands on this vehicle? The economics have really changed to suggest, yes, it makes more sense to invest in that vehicle.&#8221;<\/p>\n<h2>What that means for used car prices<\/h2>\n<p>That all means there will be fewer, low-mileage yet newer vehicles <a href=\"https:\/\/www.businessinsider.com\/used-vehicle-prices-inventory-dealerships-pandemic-car-buyers-leasing-payments-2023-1?utm_medium=referral&amp;utm_source=yahoo.com\" target=\"_blank\" rel=\"noopener noreferrer\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:10;\">headed to the used market<\/a>.\u00a0<\/p>\n<p>Fewer used vehicles in the market, but with the same amount of demand, will keep used vehicle inventory low and <a href=\"https:\/\/www.businessinsider.com\/used-vehicle-prices-inventory-dealerships-pandemic-car-buyers-leasing-payments-2023-1?utm_medium=referral&amp;utm_source=yahoo.com\" target=\"_blank\" rel=\"noopener noreferrer\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:11;\">their prices relatively high<\/a>.\u00a0<\/p>\n<p><a href=\"https:\/\/www.cnn.com\/2021\/06\/11\/business\/car-prices-record-high-short-supply\/index.html\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:12;\">Used vehicle prices have been up for several months now<\/a>, and are <a href=\"https:\/\/www.businessinsider.com\/chip-shortage-auto-industry-car-buying-dealerships-consumers-inventory-2022-12?utm_medium=referral&amp;utm_source=yahoo.com\" target=\"_blank\" rel=\"noopener noreferrer\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:13;\">just starting to creep downward<\/a>, with <a href=\"https:\/\/www.coxautoinc.com\/market-insights\/used-vehicle-inventory-december-2022\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:14;\">the average cost at $27,143<\/a> in December, per Cox.<\/p>\n<p><strong>Related video:<\/strong><\/p>\n<p><style><![CDATA[.embed-container { position: relative; padding-bottom: 56.25%; height: 0; overflow: hidden; max-width: 100%; } .embed-container iframe, .embed-container object, .embed-container embed { position: absolute; top: 0; left: 0; width: 100%; height: 100%; }]]><\/style>\n<\/p>\n<div class=\"embed-container\">\n <lite-youtube videoid=\"ESSRdDxOtas\" data-thumbnail=\"\"\/>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Vehicle leases made up 31% of the auto market in January 2020, and just 17% in July 2022. Kekyalyaynen \/ Shutterstock.com Vehicle leasing was down almost 50% last July, compared to January 2020. Rising lease costs and changing buying habits are driving the change. That means less supply going to the used vehicle market, keeping [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":8313,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[2],"tags":[],"class_list":["post-40937","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry"],"_links":{"self":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts\/40937","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=40937"}],"version-history":[{"count":0,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts\/40937\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/media\/8313"}],"wp:attachment":[{"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=40937"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=40937"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=40937"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}