US Spending on MV Leases to Rise as Consumers Opt for Larger, Pricier Vehicles

2/16/2022

Cleveland, OH, February 16, 2022 — US consumer spending on motor vehicle (MV) leases is forecast to rise 1.3% per year in nominal dollars through 2025, according to Motor Vehicle Leasing: United States, a report recently released by Freedonia Focus Reports. Increased consumer leasing of crossover utility vehicles (CUVs), sports utility vehicles (SUVs), and trucks – which generally lease at a higher price point – will drive growth over the forecast period. Furthermore, those aged 18-34 years – the population cohort most likely to lease a car – will continue to fuel replacement demand for car leases, especially as they begin to start families, which often requires upsizing a vehicle to accommodate more passengers and luggage. Those in the 18-34 cohort will also be attracted to car leases due to the relatively low monthly payments compared to those of car loans, as this generation sustained long-term harm to wealth formation due to the 2007-2009 recession. People of this age group also tend to be technologically minded, making leasing more attractive for those seeking new MV features. Finally, with manufacturers continually expanding and improving the features installed in these vehicles, some consumers will choose the short term commitment of leasing so that they can more quickly update to the newest technology.

These and other key insights are featured in Motor Vehicle Leasing: United States. This report forecasts to 2021 and 2025 US personal consumption expenditures (PCE) on motor vehicle leases in nominal and real (inflation-adjusted) US dollars. Expenditures are segmented by vehicle type in terms of:

  • automobiles
  • CUVs, SUVs, and trucks

To illustrate historical trends, total PCE, the various segments, and price indexes by segment are provided in annual series from 2010 to 2020.

For the purpose of this report, trucks include light vehicles such as CUVs, pickup trucks, SUVs, and vans. Motorcycles are excluded from the scope of this report, as are medium- and heavy-duty trucks, and RVs (recreational vehicles).

PCE data include spending by nonprofit institutions serving households (e.g., the value of education services provided by nonprofit colleges or medical care provided by nonprofit hospitals). Consequently, the spending by such parties on motor vehicle leases is included.

More information about the report is available at:

https://www.freedoniafocusreports.com/Motor-Vehicle-Leasing-United-States-FF95043/?progid=91541