By: Robert O'Hara, VP Strategic Alliances, GrooveCar & CU Xpress Lease
With new car and truck lease volume doubling since 2011 combined with leasing accounting for 32 percent of new vehicle sales in the first half of 2016, as reported by Automotive News on August 3, 2016, it’s time for your credit union to hop on the train. While on average leasing accounts for 32 percent of vehicle sales, there are some regions of the U.S. where leasing accounts for 60 percent of the loan market.
Information on leasing is everywhere and the industry is abuzz over it for good reason. In April, the most recent numbers released from CUNA Mutual Group reports new-auto loan balances grew at a 20% seasonally-adjusted annualized growth rate in April. Several reasons are given for this growth including low interest rates, improving labor market and the expanding driving-age population. As the economic picture improves for the millennial, this expanding populous is having an impact. It is no secret they are drawn to the benefits of leasing. As the largest generation hits the streets in their new vehicles expect to see leasing to continue to explode.
I shared my thoughts on leasing and why credit unions should come back to leasing in an article interview this week with Ray Birch of CU Today, entitled, “Time for More CUs to Offer Auto Leasing?” I truly believe the answer to this question is YES. I speak with credit unions from all over the country; I don’t want them to compete for only a portion of the market that is not leasing. I want them to go after it all. Trust me, most credit unions I work with have the demographics to provide a leasing program. Our easy to implement CU Xpress Lease will get credit unions into the market and competitive. In my next blog post I will be sharing our growth report on leasing. In the meantime, I hope you have the opportunity to read this interview, the link is provided below.
As always, I invite any credit union who would like to explore if leasing is the right choice for increasing your auto loan portfolio, to contact me at firstname.lastname@example.org or call 631.454.7500 x124.