Small-Car Leases on the Rise, Lease-Swap Company Says

Small_cars

Leases are gaining traction in an unlikely area: the small-car class. This is according to Swapalease.com, which released a report on Thursday that said small-car leasing swaps boomed 33% in 2012, outpacing 2011's 18% growth. The Cincinnati-based website counts everything from entry-level runabouts to traditional non-luxury subcompacts and compacts in the group, whose growth exceeded trucks (up 26%) but not luxury cars (up 38%).

Small cars took up a bigger piece of Swapalease.com's pie, but overall inventory increased just 9%. Spokesman John Sternal told us midsize cars, by contrast, were the big loser.

Does that mean actual leasing among small cars has improved? It's hard to say. The increase in overall small-car popularity in 2012 could be responsible for some of the leasing gain. New-car sales for all traditional non-luxury small cars improved 17.2% versus 2011, according to Automotive News data. Leasing overall continued to grow in 2012; CNW Marketing Research reported year-over-year leasing gains every single month.

We reached out to GM, Ford and Toyota to see if their lease share among small cars has increased in 2012. Toyota didn't have 2011 small-car lease information immediately available to compare, but more recent data suggests leasing among small cars is on the rise. Excluding fleet sales, about one in five Corollas in the first three months of 2013 were leased — up from 15.1% in all of 2012. GM and Ford, meanwhile, didn't provide any information.

Swapalease.com named average monthly rates for small-car owners who swapped their leases among six popular cars in 2012 and 2011. That means those cars aren't necessarily 2012 or 2011 models, Sternal said. They could include cars up to a few model years back, depending on how many months owners have left on their leases.

Lease_volume_2013

The website said higher-quality small cars have gained residual value in recent years, which lowers monthly lease rates. But five of the six cars listed have higher rates. What gives?

"We also had to factor in the fact that the cars, the product quality, has an impact on the residual as well as the product price, and that's where we're coming from," Sternal said. That means late-model redesigns entered the leasing-swap pool between 2011 and 2012, driving up monthly rates. It's why the Toyota Corolla, which was last redesigned for 2009, and Ford's Fiesta — introduced in 2011 and never redesigned — stayed put.

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Comments 

Sam

This isn't a surprise given wages are stagnant, we're $17T in debt, and our economy is close to having 0% growth because Bernanke loves printing money and giving it to the big banks at 0%.
I've never leased in my life but would today without hesitation. It's much better to have $0 out of pocket and an affordable payment just to get through the next few years. Soon the stock market bubble will pop and it's going to be ugly.

I would rather not lease and just buy upfront because I would rather have less repayments per month, then I have now. Leasing puts someone in debt.

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