CNW Research: CPO Primed for Big 2014
Bandon, Ore. — With nearly three million leased vehicles set to expire in 2014, CNW Research reported that the certified pre-owned (CPO) market should have a solid year with excellent supply and reasonably high-quality returns.
The market research firm said there will be about 45,900 12-month leases expiring in 2014, with about 39,795 of that total being vehicles of “sufficient quality and model type to be prime CPO contenders.”
“Including all leases — about three million — ending in 2014, CNW estimates that 1.33 million will have been maintained sufficiently well and have acceptable mileage to be fodder for the CPO market,” wrote CNW’s Art Spinella in the firm’s monthly e-newsletter.
Spinella also noted significant shifts in the length of leases. “In 1990, for example, about 17% of all leases — mostly at Ford — were 24-month contracts, while financial institutions gravitated toward the long five-year contracts. In 1990, 29% of leases were 60 months.
“The recession caused a slight bulge in 60-month leases, as worried consumers elected to go for a longer term and lower monthly payment,” Spinella continued. “That, however, has revered, and in 2013, only 10% of leases are five-year deals, continuing the pre-recession trend of shorter terms.”
Spinella also noted that with leasing capturing a 30% share in December, the next five years will see 14 million off-lease cars and trucks returning — even if OEMs were to put a halt to leasing today. “Of those, six million would be CPO candidates,” Spinella noted.
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