What's Driving the Leasing Boom? Insights into a Growing Trend

In our August newsletter, we mentioned how car leasing was approaching pre-pandemic levels in 2024. A large reason for the increase is a growth in EV leases during the current calendar year, which is conversely impacting financed EV sales.

This trend should stick around for the foreseeable future. Why are car buyers turning to leasing? Well, it's simple: new cars are becoming less and less affordable. 

The below table, based on research by Edmunds, outlines what consumers are faced with when looking at new cars.

What do these numbers mean? It means that in Q3 2024, the average new vehicle sale is roughly $47,000, with a down payment of nearly $7,000 and just over $40,000 financed. And their monthly payments? An average monthly payment of over $700 is out of budget for a lot of consumers. For many buyers, it is like paying a second mortgage. 

What does this mean for dealerships? There's a saying that goes as such: Every disadvantage has its advantage. While this can adversely impact your dealership's ability to sell new cars with financing, it also presents an opportunity for your dealership to offset this decrease with leasing. And what about the cars you lease? A large chunk of those will be certified pre-owned autos that you can sell in the future.

This month's big question: What are some actions your dealership can take to improve the leasing experience for your audience?

October 2024: Meanwhile, in Dallas...

We're quickly approaching the final stretch of the year! To conclude the summer, our team attended the Portfolio Agent Meeting and got lost in the charm of Dallas.

Events like these are always a great opportunity for our team to catch up outside of the workplace and we make the most of it! But more importantly, these events give us the chance to learn from and network with other agencies. This idea exchange gives us the tools we need to better serve our dealer partners.

Interested in some new ideas you can use to boost your profitability? We're only a click away. Chat With Us.

Additional Resources

Driving Well-Being: Mental Health Tips for Dealership Teams

Claim Your Respect | Simple Acts, Big Impact

Be in the know: Industry Intel

The First and Most Crucial Step to Profitable Used Cars: In today's competitive automotive market, efficient reconditioning is more crucial than ever. Adopting digital recon tools can help dealerships optimize operations, reduce costs, identify bottlenecks and improve their profitability.

New-Vehicle Prices Moving Little: Despite increased incentives and a growing supply, new-vehicle prices continue to hover near record levels. As the market navigates economic uncertainty and a competitive landscape, the outlook for future price changes remains uncertain.

Rural Friendship car dealership feels like home: A  Kia dealership in Beckley, West Virginia (a town of less than 20,000 residents) was named the #1 rural dealership in Automotive News' 2024 Best Dealerships to Work For list by focusing on community engagement, employee development and dealership culture. 

Homegrown Technicians Bolster Teams: A Houston Lexus dealership is bucking the industry trend of technician shortages by successfully training and retaining their own talent. Through targeted recruitment programs and a supportive work environment, the dealership has developed a team of highly skilled technicians who are passionate about their craft.

Bookmarked and Inspired: Our Top Picks and Recommendations

The 80/20 Principle: The Secret to Achieving More with Less by Richard Koch discusses the powerful idea that a small percentage of your efforts produce a disproportionate amount of results. Discover how to identify the most impactful 20% of your tasks, projects, or customers to maximize your time and resources. With practical strategies and real-world examples, this book empowers you to achieve more with less effort, leading to increased productivity, success, and a better work-life balance.

Got a book you just couldn't set down? Tell us all about it here.

Ask Us Anything| The best competitive advantage comes from the quality of your connections.

Do you have questions related to the F&I department- products, sales strategies, your professional development, or dealership profitability? We're here to connect with you and support your success. Write to us.