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Lease Volume Reaches Record High in 2016, Edmunds Reports

February 7, 2017
3 min to read


SANTA MONICA, Calif. — Automotive lease volume reached an all-time high of 4.3 million vehicles in 2016, according to the latest Lease Market Report from Edmunds, account for 31% of new-vehicle sales in 2016. That’s up from 29% in 2015.


Over the past five years, lease volume has grown by 91%. And as the popularity of trucks and SUVs grows — SUV sales surpassed passenger car sales for the first time ever in 2016 — consumers are turning to leasing to help them afford these higher priced vehicles.

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“Leasing has long been the gateway for car shoppers who are looking to get a nicer vehicle than they could if they financed,” said Jessica Caldwell, Edmunds executive director of industry analysis. “Because SUVs and trucks are holding their values so well right now, it makes them much more accessible for a much wider swath of the market, further fueling their popularity.”


The average lease payment in 2016 was $120 less than the average finance payment. For large SUVs, the average lease payment was $125 less, and for large pickup trucks the difference was $206, thanks, in large part, to high residual values. Lease terms have hovered at a fairly constant average of 36 months over the past five years, while the average finance term is continuing to creep upward — averaging 69 months in 2016 (compared to 64 months in 2011).


While millennials still only leased 12% of all vehicles leased in the United States in 2016, they opt to lease more proportionally than all other age groups. Nearly one-third of all millennials who purchased a new vehicle in 2016 chose to lease — up from 21% in 2011. Millennials also accounted for the highest share of lessees with a household income under $50,000, which, according to the vehicle information site, presents a significant opportunity for automakers looking to capture the hearts and wallets of these likely first-time car buyers.


“Leasing hits a sweet spot for millennials — they can enjoy the benefits of owning a new vehicle at a low price point with the latest features they crave,” Caldwell said. “If automakers make a positive first impression with this influential group, they have a great opportunity to build lasting relationships as brand loyalty rates are much higher among shoppers who lease vs. buy.”


Luxury brands still capture the most lessees, but brands that have a heavy truck and SUV lineup are starting to play catch up. Brands like RAM, GMC and Chevrolet, which historically had lease penetration rates hovering between five and twelve percent five years ago, have seen lease rates jump more than 100%.

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“While we think overall lease penetration will start to level off to 30% in 2017, the shift from passenger cars to trucks and SUVs shows no signs of slowing down,” Caldwell said. “As long as gas prices remain low and residual values on trucks and SUVs stay high, that segment of the lease market is likely to continue to expand this year.”

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