Where Loans vs. Leases Are Becoming an Affordability Issue

Equifax has new insight as we close out 2018 on the topic of affordability, with data that show where affordability is becoming more of a potential issue. According to Equifax, the average lease balance financed has increased just +5.5% from January 2016 to November 2018. Conversely, the average loan balance financed during the same period has increased +24.2%.


Lease Balance

Jan. '16: $15,415

Nov. '18: $16,257



Loan Balance

Jan. '16: $21,928

Nov. '18: $27,241



"No doubt, sticker prices have increased over the past few years, and it's difficult to say that consumers haven't begun to feel this increase in the wallet, especially as interest rates have also increased lately," said Lou Loquasto, Automotive Finance and Dealer Leader for Equifax. "Affordability may be a growing issue entering 2019, as more auto shoppers turn to higher priced SUVs and luxury vehicles with the latest technology and features. Conversely, as lease terms continue to shrink, value-conscious shoppers will focus more on keeping payments as low as possible and will look for deals that finance only the portion of the vehicle they plan to use during a given term."


Lou Loquasto would be interested in expanding on this insight, and to discuss how data solutions are available today to help with credit qualifications, verifications and the insight needed to match the right vehicle budget with each shopper to maintain proper loan risk levels.

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