What's driving new-vehicle sales in 2014?
Pent-up demand has carried the load for some time. But Tom Webb, chief economist at auction giant Manheim, says the market this year is being powered by people whose leases are expiring.
Webb says the rise in lease returns this year will approximate the increase in new-vehicle sales: about 400,000 units. But next year, as pent-up demand continues to dissipate, he says the increase in off-lease vehicles likely will exceed the increase in sales.
He predicts off-lease vehicle volume will hit 2.1 million this year, up from 1.7 million in 2013, and will grow to 2.5 million in 2015 and top 3 million in 2016.
Webb says a new-vehicle market supported by off-lease returns is a good thing.
"If you consider that new vehicles are increasingly being bought by high-income households that do, in fact, want to trade on a regular cycle, then they should be in a lease, not a retail contract."