Report: Ready for Surge in Off-Lease Cars?
A surge in off-lease vehicles is headed to US car markets, creating a similar environment to the early 2000’s when leasing companies lost over $20B in residual value recovery. Experts say this influx in inventory will reduce the selling price of used vehicles by as much as 7.5% by 2018.
While many lenders learned from the early 2000’s experience and made adjustments to their residual forecasting approaches, we believe that many lenders are at risk for financial losses once again due to over-valued residual forecasts. Failing to factor these emerging market dynamics when forecasting residual values can falsely inflate the expected profits from of any leasing program. However, taking the right steps now can result in recovering hundreds of additional dollars for each of your leased assets.
The paper named “Are You Prepared for the Surge in Off-Lease Vehicles?” outlines five mission-critical steps that can be taken to protect the profitability of your lease remarketing and asset disposal efforts in this new marke