Younger Consumers Will Drive Leasing Growth

By Staff Writer April 11, 2022

U.S. consumer spending on motor vehicle leases is forecast to rise 1.3% per year in nominal dollars through 2025, according to Motor Vehicle Leasing: United States, a report recently released by Freedonia Focus Reports.

Increased consumer leasing of crossover utility vehicles (CUVs), sport-utility vehicles (SUVs), and trucks – which generally lease at a higher price point – will drive growth over the forecast period.

Furthermore, those aged 18–34 years – the population cohort most likely to lease a car – will continue to fuel replacement demand for car leases, especially as they begin to start families, which often requires upsizing a vehicle to accommodate more passengers and luggage.

Those in the 18-34 cohort will also be attracted to car leases due to the relatively low monthly payments compared to those of car loans, as this generation sustained long-term harm to wealth formation due to the 2007-2009 recession. People of this age group also tend to be technologically minded, making leasing more attractive for those seeking new vehicle features.

Finally, with manufacturers continually expanding and improving the features installed in these vehicles, some consumers will choose the short-term commitment of leasing so they can more quickly update to the newest technology.

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Last modified on Friday, 15 April 2022 13:10