Auto leasing will become more difficult this year, undercut by rising interest rates and falling residual values from a growing supply of late-model used vehicles.
That's especially true for SUVs and crossovers, which have had a long run of favorable leasing circumstances since 2009 because few used models were available.
But in 2018, Cox Automotive expects 3.9 million vehicles to come off lease, 300,000 units more than in 2017. And in contrast to prior years, when the off-lease mix was car-heavy, half of the returns will be light trucks.
Larger used-vehicle supplies, rising interest rates and tighter credit all will combine to make originating leases more expensive, said Eric Ibara, director of residual value consulting at Kelley Blue Book.
He expects leasing to drop to 27.5 percent of total U.S. light-vehicle sales this year, well below a peak of 33 percent in 2016.