Leasing has surged as a share of new-vehicle transactions to impressive indexes in the fourth quarter of 2015, this being caused mainly by captive finance companies seeking to boost sales by keeping customers' monthly payments low. Leasing has been fairly rare in the used-vehicle market, but its share is growing. In such a way more and more lenders are offering leases on used and certified preowned vehicles.
This strategy is meant to cope with an industrywide flood of 3.1 million off-lease vehicles returning to the market this year. The number of off-lease vehicles will be up almost 20 percent from 2015, and will continue to grow in 2017 and 2018, specialists forcast. Now Toyota, Ally Financial and BMW are encouraging used and certified leasing to prepare for the glut of lease returns. Infiniti is considering a certified leasing program.
Leasing more certified preowned vehicles seems like the best solution to get more customers into the off-lease vehicles according to Toyota Motor Sales U.S.A. Certified leasing was available to Toyota, Scion and Lexus dealers before, and when those dealers began tapping it in larger numbers, Toyota Financial Services decided to encourage its use with various incentives. Toyota, Lexus and Scion certified vehicle lease terms will last 36 months on average, similar to a new-vehicle lease. To be eligible for a lease, Toyota and Scion certified vehicles must be no more than 3 model years old with fewer than 65,000 miles on the odometer.
Other lenders have taken similar approaches or are currently assessing a certified lease program.