Auto loans, which are historically less expensive to incentivize, received the most aggressive offers this spring from captive finance companies, with no-interest, seven-year loans driving new-vehicle sales in the early days of the pandemic. Leasing levels concurrently fell industrywide, according to J.D. Power data, and remain below prior-year levels.
The shift in incentives is one factor that hindered leases this year. Fewer sales, lease extensions and early closures of high-penetration leasing states such as New York and Michigan all contributed to the trend, as did limited new-car inventory and extensions on leasing contracts for many customers impacted by pandemic-related shutdowns.
Leasing likely will remain a largely captive-controlled business, though credit unions are eyeing opportunities to move into the spaces captives left behind.
Mike Buckingham, senior director of the auto finance practice at J.D. Power, said credit u…