CINCINNATI—Signs continue to point to an expanding leasing market, according to analysis by one firm.
After lease credit approvals dipped in December (60.9%), lease approvals rose markedly in January (75.0%), Swapalease.com reported.
“January has traditionally been a strong month for lease approvals, so we aren’t terribly surprised that the number saw a bounce-back from December and end-of-year levels,” said Scot Hall, executive vice president of Swapalease.com.
Over the last three months, the lease credit approval rate has been slightly above average at 72.5%, compared with the overall 2014 rate that saw 69.0% approvals.
Swapalease.com is also seeing greater interest in leasing from Millennials, students and subprime borrowers. Those trends “present mild concerns,” the company stated.
Swapalease.com said it is monitoring the volume of subprime shoppers entering the auto market. According to a recent report by Equifax, nearly four out of every ten approvals for car loans, credit cards and personal borrowing were given to subprime borrowers in 2014, Swapalease.com explained. “And while the credit reporting agency shows that these borrowers are improving their credit scores three years after taking out their car loans, leasing remains a challenge for subprime customers.”
A larger number of subprime customers have also entered the Swapalease.com market, with many seeing declines from banks that scrutinize their credit when applying to take over someone else’s existing lease contract, the company reported. Borrowers post their leases on Swapalease.com, and interested parties can apply to assume those leases.