CINCINNATI—Lease credit approval rates fell as the New Year kicked off. Swapalease.com reported that car lease credit applicants registered a 57.8% approval rate in January, down from 62.0% in December. January’s rate was higher than the 50% rate from a year ago.
Some of the reasons for the lower-than-normal approval rate can be attributed to the higher-than-average number of applicants registered in January, the company said.
“With holiday promotions and strong emphasis on luxury lease offers typically signaling heavy applicant volume in December, the marketplace saw a continuation of high volume applicants opening the New Year in January. With this higher volume comes a variety of credit histories, including more applicants with less-than-stellar credit approved by the banks,” Swapalease.com stated.
Over the last three months and dating back to November 2017, the lease approval rate registered at 62.2%. The majority of applicants are interested in taking over leases in the mid- to high-end luxury categories, including higher-end SUVs. These vehicles come with an average monthly payment of $499 or higher, Swapalease.com explained.
“We’re continuing to see a healthy consumer appetite in taking over existing leases in the online marketplace, and a large number of these interested parties feel confident in the monthly payments they’re willing to take on,” said Scot Hall, executive vice president of Swapalease.com. “The banks and lease companies have remained firm in their criteria for approvals, which is why we continue to see a slightly higher number of those still not being approved. Credit profile remains extremely important when applying for a lease across any segment or type.”