Swapalease.com, the nation’s largest online car lease marketplace, today unveiled results of its latest survey on incentives, with dealers saying they’re offering roughly the same incentives on financed vehicles in 2017 compared to last year, but are offering 3X as much incentives on lease deals today versus a year ago.
Incentives Jump for Leases; Remain Stable for Financed Vehicles
Swapalease.com presented an online survey to approximately 550 dealers across the U.S. during the end of October asking about what kind of incentives they’re offering on financed and leased deals. The majority of dealers said they averaged $1500 per vehicle incentives for financed deals in 2016, and that number jumped to 60% in 2017. However, the majority of dealers (44%) polled said they offered an average of $500 per vehicle incentives on leased deals in 2016, whereas the majority (58%) said that number was $1500 on lease incentives in 2017.
According to the USA Today, the average discount has increased $491 per vehicle, compared to the average increase in vehicle price at $128 per vehicle.
Move Inventory, or Protect the Residual?
A handful of carmakers have said in 2017 they plan to reduce the lease output in order to reduce exposure to future losses on residual values. Ford Credit said in an Automotive News article its lease activity represented 22% of U.S. retail volume in the second quarter of 2017, down from 23% a year earlier.
A reduction in lease activity may hamper the dealer’s ability to move more inventory. According to dealers in the Swapalease.com survey, 68% said they would rather use incentives on leases, which may lower residuals over time, but still give them a chance to move more inventory every 3-4 years.
Conversely, only 32% of dealers said they’d rather use incentives on financing to preserve residuals on vehicles, even if it means the customer sales cycle slows to 5-8 years when auto loans mature or expire.
Dealers also said more customers are asking for deals on lease offers today (56%) compared with that of deals on financed offers (44%).
What is a better use of incentives for sales at your dealership?
• 83% said use incentives as a way to lease more vehicles
• 17% said use incentives as a way to finance more vehicles
Headquartered in Cincinnati, Ohio, Swapalease.com is the world’s largest automotive lease marketplace and the pioneer in facilitating lease transfers online. More specifically Swapalease.com matches individuals who want to get out of their lease with people who are looking for short-term lease agreements. Prospective buyers can search the listings for the exact vehicle they want, and then register for a nominal fee, allowing them to use Swapalease.com’s safe online system to contact the prospective seller and close the deal. For more information about Swapalease.com or how to exit your lease early, call 866-SWAPNOW or visit www.swapalease.com.