Leasing continues to recover but is unlikely to take a much larger share of retail deliveries unless automakers pay out more incentive money, said Bill Muir, president of Ally Financial.
An excess of lease incentives "destroyed brands and destroyed residual values" in the years prior to the last sales downturn, he said. Now, though, automakers don't have as much excess manufacturing capacity, and that allows them to "show some discipline" on lease incentives, Muir said on the sidelines of the National Automobile Dealers Association convention in Orlando last month.
According to Experian Automotive, lease penetration reached 24.8 percent of indirect financing in the fourth quarter of 2012, up from 23.1 percent the year before. Both shares were up from the fourth quarter of 2007, before the worst of the auto sales downturn, when leasing accounting for 22.5 percent of indirect financing.
Leasing bottomed out at 14.2 percent of indirect financing in the third quarter of 2009, Experian data show. Many lenders cut back on leasing or quit entirely because resale values fell for gas-guzzlers coming off leases and auto lenders themselves were having trouble borrowing money.
Even luxury brands temporarily dialed back on leasing, but not as much as mass-market brands did, analysts say.
Muir: Leasing continues to recover.
The American Financial Services Association polled a few hundred attendees at its annual Vehicle Finance Conference last month about their expectations for leasing.
Using remote controls to register their opinions, about two-thirds of those voting said they expect leasing to grow, but a majority said they expect leasing to stay below 30 percent of the market.
Five percent said they expect leasing to decline. About 27 percent said they expect leasing to stay on a plateau around 24 to 25 percent share. The biggest group, about 44 percent, said leasing could grow to 26 to 29 percent share. About 24 percent said leasing could reach 30 percent share of the market.
"We see leasing steady at a very high level," said Christian Dahlheim, CFO of VW Credit, which services both the Volkswagen and Audi brands.
Experian Automotive data show that in the fourth quarter of 2012, leasing accounted for around 63 percent of new-vehicle financing at VW Credit.
Said Dahlheim: "We have a lot of owners who want a new car every two to three years."