SUVs, crossovers and pickups projected to log most off-lease growth in 2019

Article by Christian Andrei, on January 14, 2015

SUVs, crossovers and pickups are expected to post the most off-lease growth in 2019 as the demand for these vehicles continues to rise, according to analysts from Kelley Blue Book. For 2014, cars led as the top segment coming off lease. Based on vehicles leased in 2014, off-lease volume of full-size pickups in 2019 will surge by 93 percent from last year’s levels.

On the other hand, off-lease volume for full-size SUVs and full-size crossovers combined is expected to hike 77 percent while off-lease volume of luxury compact SUVs and crossovers combined is projected to surge 71 percent. Off-lease volume of compact SUVs and crossovers combined is seen to grow 59 percent.

While non-luxury utility vehicles accounted for 28 percent of new-vehicle sales, it represented 46 percent of total industry volume growth, according to Eric Ibarra, director of residual value consulting at KBB. This indicates a shift in consumer preference from cars to trucks and utility vehicles.

Such shift is also indicated in KBB’s residual value predictions for vehicles 60 months after coming off lease in January and February this year. According to Ibarra, overall residual values after 60 months of vehicles coming off leases in January and February of 2015 would be 2.2 percent lower than those of vehicles leased in the same period in 2014.

In general, these vehicles expected to retain their sticker values better than most cars, according to the data. For instance, compact utility vehicles are expected to retain 40 percent of their value after five years, while compact cars are projected to hold only 37 percent of their value after half-a-decade.

Ibarra said during a presentation by Cox Automotive both luxury utilities and non-luxury utilities contributed nearly 50 percent of the increase in 2014 sales. On the other hand, the car segment was flat year-over-year, although it accounted for 40 percent of the industry sakes.

According to data from Kelley Blue Book Residual Value Consulting, midsize cars were the top off-lease volume segment in 2014 at 296,164 units; followed by compact cars and entry-level cars, each with over 200,000 units.

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