CINCINNATI—Car lease credit applicants registered a 70.0% approval rate in July, an increase from 67.6% in June, Swapalease.com reported.
The July number is also higher than the approval rate at the same time last year, when the approval rate was only at 65.1% after a few months of the pandemic setting in. The increase indicates consumer credit levels are also holding steady as more people are vaccinated from COVID-19. Additionally, households continue to save stimulus relief provided by the government, the company stated.
“As opposed to consumer borrowing, many are utilizing their savings accrued during the pandemic toward paying debt,” the company said. “With consumers reigning in their credit usage as well as lowering revolving debt, Americans are now looking to upgrade their vehicles to a newer model but are searching channels such as Swapalease.com for inventory that may not be readily available at a dealership.”
Swapalease.com added that lease applicants coming through its website—which matches lease holders looking to exit their agreement early with those seeking a shorter-term lease—have had strong credit recently and are seeking payments on a lease that are more attractive than what they can receive from a dealership.
‘Continuing to Stabilize’
“Since credit strength is continuing to stabilize due to the figures maintained throughout the third and fourth quarters, lease credit approvals slightly decreased during the months of May and June,” said Scot Hall, EVP of Swapalease.com. “Since Americans were either saving or paying down debt with their government stimulus money, consumer credit confidence ultimately grew. This has led to an increase in credit approvals during the month of July – hinting at larger spending in future quarters.”