Lease Returns, Former Rentals to Flood Used Car Market
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.
SEE ALSO: Used Car Prices Expected to Fall in 2014: NADA
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.
[Source: TTAC]
Jason Siu began his career in automotive journalism in 2003 with Modified Magazine, a property previously held by VerticalScope. As the West Coast Editor, he played a pivotal role while also extending his expertise to Modified Luxury & Exotics and Modified Mustangs. Beyond his editorial work, Jason authored two notable Cartech books. His tenure at AutoGuide.com saw him immersed in the daily news cycle, yet his passion for hands-on evaluation led him to focus on testing and product reviews, offering well-rounded recommendations to AutoGuide readers. Currently, as the Content Director for VerticalScope, Jason spearheads the content strategy for an array of online publications, a role that has him at the helm of ensuring quality and consistency across the board.
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