Larger vehicles, new car leases trending up in York
- New vehicle leases reached record levels in 2015.
- One York County dealership GM said leases accounted for about 37 percent of new car sales in February.
- Low gas prices, consumer preferences lead to rise in pickup truck and SUV sales.
Bob Darr recently leased a 2016 Ford Escape SUV, highlighting two major trends local vehicle dealerships have been seeing recently.
New vehicle leases in the U.S. reached their highest levels ever in 2015, according to a 2016 report from Manheim, the nation's largest used-car auction firm. Consumers trending toward SUVs and pick-ups, meanwhile, have pushed passenger car's share of overall sales to a 12-year low, according to J.D. Power reports.
Darr, general manager of Beasley Ford Lincoln in Springettsbury Township, said he leased the SUV for his daughter because prices are low and incentives are high.
"More and more people are realizing (leasing) is a great way to get in a new car," he said. "The numbers just keep going up."
Darr said leases made up approximately 37 percent of new vehicle sales at his dealership in February.
Leasing rates have increased every year since 2009, reaching nearly 4 million in 2015, according to Manheim's report. The most leased vehicle was the Honda Civic.
Dean Lloyd, general manager at Toyota of York in Springettsbury Township, said he's also noticed the uptick in new car leases, but he's also noted an increase in the number of leased vehicles being brought back.
Lease terms are typically set for three-year periods, and more than 3 million vehicles will come off lease in 2016, according to Manheim's report. Returns are expected to climb near 4 million vehicles by 2018.
Lloyd said he definitely expects the influx of lightly used vehicles to affect used-car prices. A J.D. Power report predicted used-car prices will fall 3 percent to 4 percent for the year.
Darr said he's also seen an increase in trade-ins for older cars with higher mileage.
"The quality of the vehicles has gotten much better," he said. "People aren't afraid to drive their car 150,000 miles anymore."
Neither Lloyd not Darr expects the decrease in used-car prices to affect the market for new cars, which saw record high sales in 2015.
A major reason for the sales boom has been a shift in preference toward larger vehicles.
Lloyd said RAV4 SUV purchases have "exploded" at his dealership in the past couple years, while Darr said Ford F-150 sales have likewise been "through the roof" for his business.
Darr said he suspects that falling gas prices are instrumental in the trend.
The national average for gas prices Tuesday afternoon was $1.82 per gallon, according to GasBuddy.com. The Pennsylvania average was $1.93 per gallon, while the York County average sat at $1.90 per gallon.
Meanwhile, dealerships have been left with too many passenger vehicles, which saw its average number of days on lot rise to a two-year high of 78 days in January, according to a WardsAuto report.
Lloyd said he's seen the downward trend in sedan sales, but he added that Toyota does a good job of controlling its inventory to coincide with consumer trends.
"This has been going on for well over a year," he said of the shift toward trucks and SUVs. "We've already adjusted our stock."
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