With 3.2-million new cars and light trucks leased last year in the U.S., a flood of lease returns are expected to hit the used car market in the coming years.
That number is nearly a threefold increase compared to 2009, and the last time a large number of off-lease cars and trucks hit the market was 2002. The result in 2002 was lowered residual values in used car prices. In recent years however, the used car market has been booming, though prices are expected to fall this year.
Unlike 2002, when the off-lease vehicles hit the market in a couple of years they will benefit from growing certifed pre-owned (CPO) programs. According to the Manheim Used Car Report, the CPO market is 23-percent larger than the total off-lease volume.
In addition, sales of new cars and light trucks to rental companies increased by one percent last year, another slight increase of used car vehicles that will enter the market in a couple of years.