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