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Famous Cars: Patton’s Willys JeepWhere are All the Off-Lease Car Deals?
Dealerships see fewer returning lessees, meaning fewer off-lease cars. Find out how this slump happened and what to expect.Dealerships Are Back to Normal – Almost
Dealership inventories were a weird place to be during the pandemic. New cars were in short supply, vehicle orders would take months to get to the lot, and dealers were clamoring to fill their lots with used vehicles to sell. We’re thankfully back to normal at the dealership lots as new and used inventories have stabilized. One thing that isn’t fully back to normal though is off-lease car deals.
Fewer Lease Vehicles Returning
Off-lease cars are vehicles dealership took back in from a lessee. These off-lease vehicles are some of the best sellers for dealerships as they’re relatively new, have low mileage, come at a better price than brand new vehicles, and some still carry a portion of the manufacturer’s warranty. They’re an easy sell and a great value for shoppers, so it’s a win for everyone involved.
Back in 2021, less people ended up leasing new cars from dealerships. Most dealerships typically experienced one in three shoppers leasing a vehicle prior, but in 2021 it dropped to as low as one in six. This was the result of low inventories, shoppers waiting out the pandemic, lessees purchasing their vehicle rather than returning it, or more shoppers taking advantage of financing opportunities during that period.
With the average lease running for 36 months, 2024 coincides with 2021 lease vehicles planned to return to dealerships. The drop in lease vehicles that year means fewer off-lease deals to be had now and it could hurt both the dealerships and shoppers. Off-lease vehicles act as a bridge between new and used vehicles, so there are less opportunities to provide lightly used newer vehicles. Returning lessees also were a recurring boost to dealership inventories and provided recurring sales.
There’s also the matter of used car pricing. Used car prices skyrocketed during the pandemic as dealers had to utilize them for profit in place of new car sales. While the used market has begun to cool down, fewer off-lease cars may hamper that progress. Shoppers also are missing out on residual manufacturer warranties and are only left with the option of buying brand new or adding on a third-party option.
Is Now the Time to Lease a Car?
Off-lease inventories aren’t going to bounce back after this year as the lease drop persisted in subsequent years of the pandemic. This issue at dealerships could persist well into 2027, but it also could pose an opportunity for new car shoppers. Manufacturers could boost incentives towards leasing new vehicles to help fight this slump in off-lease inventories for the future. So, keep an eye out on the monthly incentives and you might be able to get a great lease deal on a brand-new ride!
