Lease returns have been one of the dominant discussion points in the auto industry over the last few years, and rightfully so, given the influx in volumes that are now approaching a peak.
But when you think about lease returns and their impact to wholesale markets, only a “subset” of the off-lease volume ends up reaching the auction lanes, Cox Automotive chief economist Jonathan Smoke said in a conference call with analysts and reporters earlier this month.
Many cars coming out of leases end up being bought by the lessee or kept by the grounding dealer.
“In fact, the grounding rate goes up as the desirability and equity position of the vehicle improves. Our analysis confirms that the mix of vehicles is improving,” Smoke said. “One-third of this year’s maturities are crossovers. All of the growth in maturities is coming in SUVs and pickups. And we’re seeing improving equity position, as well.
