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Popularity of Leasing Catching Up With Automakers

Companies seeing profits falling on off-lease cars, newly leased crossovers and sport utes.

by on May.30, 2017

Leasing's popularity may cause automakers problems when it comes to profits in the next few years.

The rise in leasing during the last few years has been one of the drivers of the record sales automakers have enjoyed during that time. However, leasing has its downside and that part of the equation is about to hit automakers — hard.

Three years ago, automakers leased 3.3 million vehicles, accounting for about 23% of U.S. sales to individual buyers, according to Automotive Lease Guide. As long as the vehicles hold their value, this isn’t a problem. In fact, it’s a good thing because it gives automakers a steady stream of higher-profit used cars to sell.

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This is good for cars because they made up about half of vehicles leased at that time. However, now that the popularity of cars has fallen, this is likely to cause problems for the makers. (more…)