Despite dealerships' tight inventory and automakers being forced to temporarily remove features from new models because of chip shortages, lessees feel their next vehicle will be newer and more advanced than their existing models, according to a survey. The consumers also expected to pay the same amount or less than their current bill.
The Oct. 15 Pollfish study of 1,000 leaseholders found 82 percent of lessees were concerned supply issues could affect the availability of their next model, according to CoPilot, the car-shopping assistance company that commissioned the study.
But 66 percent felt their next model would be an upgrade in terms of features, and 92 percent thought their next lease or purchase would be newer, CoPilot's survey found. Fifty-six percent of customers thought it would cost them the same amount or less.
Even customers in the crunch time of three months or less left on their leases are confident they'll move to newer and better vehicles for the same or reduced cost. Ninety percent felt they'd get a newer model, and 57 percent expected to get something with better features. Sixty-six percent thought this new purchase or lease would be the same or less than what they were paying now.
"As millions of consumers come off-lease this year, they should be prepared for the fact that the car they want may not be available," CoPilot CEO and co-founder Pat Ryan said in a statement this month. "Due to the global chip shortage, a number of major automakers have announced that they need to suspend tech features like driver assistance and monitoring systems and blind spot monitoring. As a result, consumers looking to lease their next car may be facing the reality that their next vehicle may not have all the bells and whistles they're hoping for — or even safety add-ons that they've come to view as standard."
Customers are beginning to understand the reality of the industry, though. Ryan told Automotive News that four months ago, customers would have been completely clueless. Now, they're aware of the shortages, but "they're not sure it's gonna impact them." It's not until a consumer enters the market that they recognize the challenge, he said.
Vehicles are still being made available for lease, though they're not being subvented to the levels in the past, Ryan said. Customers might also need to settle for leasing a vehicle that doesn't precisely meet their desired configuration, or they might sign up for a lease that would begin when a vehicle becomes available months later.
CoPilot has been advising lessees who don't need a vehicle immediately to "buy out and keep an eye out," according to Ryan: Purchase one's current lease at the residual price and wait for better market conditions.
He said automakers also are less willing than in the past to extend leases for customers whose desired vehicle isn't yet available.
"That's kind of come and gone by now," Ryan said.
As for the customers shopping for leases today, Ryan said they should still receive comparable residuals. Even though a 1- to 3-year old car now sells for 92 percent of sticker price instead of the usual 70 percent, lessors aren't making dramatic changes to lessee buyout prices in response to current market conditions, he said.
"Nobody believes that'll be true in three years," he said.
Ryan also said the difficult lease results recently reported by some mainstream automakers might not indicate what's happening among luxury brands, which rely more heavily on leasing for their business model. A mass-market volume brand will lease to help boost the car sales they'd prefer to focus on, he said. A premium brand treats leasing as a goal unto itself, he said.