By: Frank Rinaudo, Senior Vice President, GrooveCar & CU Xpress Lease
The state of the automotive finance market for Q1 2017 have been released and people are talking. Reports recently issued by Callahan & Associates and Experian, confirm what many credit unions and dealerships are experiencing. Auto leasing across the country is up and accounts for more than 30 percent of financing, and for Long Island those numbers are more than doubled at over 70%.
Long Island offers perfect demographics for leasing: a strong economy, a commuting work force, and an urban landscape ideal for keeping mileage down. In general, people of all ages in this region prefer leasing to traditional financing because they are attracted to low payments. GrooveCar’s CU Xpress Lease, just issued its 2016 growth report, it was a very good year. The best year our credit union lease product has performed; financing nearly $1 billion in leases, with a large percentage right here on Long Island. Early indicators have found CU Xpress Lease is performing exceptionally well, we anticipate another incredible year.
The national average for leasing is 31% according to Edmunds Lease Report, on Long Island, we found that number to be much higher. When GrooveCar spoke with auto dealerships on the program, they reported business is closer to 75-80% of new car sales through leasing. The majority, one of our dealerships report, is being done through our credit unions because of aggressive and competitive rate structures. One of our credit unions on the program reports leasing is up 85% in Q1 2017. Leasing plays a major role in auto loan portfolio growth, credit unions without a lease program will not be as competitive. The numbers speak for themselves.
CU Xpress Lease celebrated 10 years of serving credit unions in 2016. Our longevity can be found in the value of having a lease product that makes a credit union whole at the end of each lease cycle. Most of our credit unions have been with us through 2-3 cycles, the program assumes the risk, wear-and-tear, fees and we provide the resources to manage the program. The professionals behind the program have been in the leasing industry for decades, we know what works and we know what doesn’t. The program is very competitive and it’s proving itself over-and-over-again where the rubber meets the road; at the dealership and with members.