It looks as if the lease boom has peaked, according to CNW Marketing/Research, of Bandon, Ore.
Consumer lease penetration trails 1998 figures by a couple of percentage points, according to CNW.
In September, for example, CNW said, leases were 31.8 percent of new-vehicle volume vs. 34.8 percent in the same month last year.
The figures represent vehicles driven for personal use - which excludes vehicles used for business, such as fleets and daily rental cars.
CNW said lease volume has dipped for a variety of reasons, including a robust economy, a greater tendency to buy new vehicles for cash and the lack of specialized lease training at dealerships.
Some automakers also are trying to wean themselves from cut-rate leasing, after suffering huge losses on residual values. To promote buying instead of leasing, they are offering incentives such as low interest rates or cash back.
'Personal-use lease volume could be off 250,000 to 300,000 by the end of the year,' said Art Spinella, director of automotive research for CNW. 'That's substantial.'
Leasing tends to be more popular when the economy is bad, he explained. During an economic slump, some people choose to lease because they do not have the money for a down payment and want to make smaller monthly payments. In the current economy, many people have more disposable income because they refinanced their homes at lower interest rates and made money on the stock market.
Another factor contributing to the decline in consumer leasing is the lack of training at dealerships, Spinella said. A few years ago, dealerships and manufacturers seemed to place more emphasis on lease training than they do now. Lease penetration could be suffering now as a result, he said.
Dealership personnel need regular training in how to present leasing as a finance option, Spinella said. Because of generally high turnover in the sales and finance departments, few salespeople and finance and insurance managers know how to explain leasing to consumers or evaluate whether a lease would suit a customer's needs.