Car leasing seems to be on the rise with more than 3/4ths of car shoppers being approved for a car lease in 2013. While a questionable way to get into driving a new car, people still seem to love car leasing even if we don’t recommend it and Consumer Report’s doesn’t recommend it.
Reports have showed increases this year for approval on lease transactions through the end of the month of July. According to data from a leading lease website, total year-to-date credit approvals were 75.6% in July, up from 73.9% through the end of June. This is the highest average recorded this year.
Historical data shows that 70% approval is considered healthy for the online car lease marketplace. They match a person who wants to exit a vehicle lease with someone who might want to take over a short-term lease. Typically these are guys who got a lease on a sweet and sexy convertible for 3-years and need to get out of the lease contract early. This is usually due to the fact their girlfriend or wife is pregnant and she is forcing him to buy a sedan or worse… a minivan. (You poor souls.) On top of that they probably need to hear about how leasing was a bad decision. (I don’t want to rub salt into your wounds but it was.)
Lease approvals have continually increased since the beginning of 2011, and the current 75.6% approval rate compares to 61.6% year-to-date approvals through July 2012.
In looking specifically at the July approvals rate, 80.6% of customers looking to take over a vehicle lease were approved by the incoming bank. This represents the second best month for approvals, behind the 88% approval rate a leading car leasing swap site recorded during May. You can’t have leasing without credit, and each interested potential car buyer must have their credit approved by the lease company holding the vehicle contract.
To put all that into regular gearhead and people terms, they want to know that you have enough money so they can screw you over when you turn in the car. You know that will happen even if you don’t want to admit it.
“The health rate of consumer credit in many cases gives drivers the confidence to upgrade into a vehicle category that’s considered higher than their previous vehicle.” said Scot Hall, Executive Vice President of Swap-A-Lease . Unfortunately Mr. Hall did not have a comment about all the poor guys trading in convertibles for minivans.
The real question, who is getting a car lease? Not me, but maybe you.