Auto Lease Balances Rise Twice as Fast as Loans

Total U.S. auto lease balances increased 9 percent in March compared with a year ago, more than twice the increase in auto loan balances, which grew by 4.2 percent over the same period.
In particular, lease balances originated by auto finance companies rose 11 percent in March versus a year ago, according to New Data from Moody’s Analytics’ CreditForecast.com and Equifax.
CreditForecast.com forecasts auto lease balances to grow at an 8 percent average annual rate through the end of 2017, while auto loan balances are expected to grow between 2 percent and 3 percent annually over the same period.
“Auto finance companies, who issue the large majority of auto leases, are more sensitive to the growth of the U.S. economy, and as the economy grows, they are likely to grow their auto lending originations faster than banks will,” said Dr. Cristian de Ritis, director of Consumer Credit Economics at Moody’s Analytics.
Lease financing represents about 10 percent of U.S. auto lending provided by finance companies, which originate just over half of all U.S. auto credit. Financing from banks and credit unions comprise the remaining portion of U.S. auto lending.

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