Consumers Want Shorter Car Leases, Survey Says

Car shoppers are interested in shorter vehicle-lease terms, according to a poll.

In an online survey of 2,500 people, about 70% say they would like lease terms of 24 months. Typical lease terms are 24 to 36 months.

Nearly 75% of the polled people showed varying interest in 30-day leases, according to the Swapalease survey. Swapalease says Uber’s plan to lease cars for what can amount to a month-long period inspired its new poll.

To recruit more drivers for transportation service, Uber’s Xchange program offers potential drivers a 3-year lease that allows drivers to opt out after 30 days.

Some F&I experts doubt quick leasing will become mainstream.

“I don’t see short-term leasing of new vehicles as feasible due to the initial depreciation vehicles take immediately after they are driven off the lot,” says Cliff Benson of Wilcoxson Buick, Cadillac, GMC in Pueblo, CO.

He adds: “The amount of depreciation a customer would have to pay down in a short-term option such as that would make the payment completely unfeasible for most consumers.”

Technically a lease must be for at least four months, and anything shorter than that is a rental, says Kahli Carmody Faivre of U.S. Warranty, an F&I provider.

Benson says his company took over a facility that had rented vehicles. “They had low rates, and people could rent as long as they wanted,” he says, adding, “That option is as close as we as an industry can come.”

He says short-term leasing of used vehicles “could be an option” although not one without challenges.

Toyota of Butte (MT) offers rental options for short term such as 30 days, says Andrew Calderon, the dealership’s F&I manager. However there really is a gap for the 6 month to 18 month type situation. Incentives to lease start at 24 months, so I can see it as a niche market.”

The expressed growing consumer interest in shorter-term lease options increases the chances it “will eventually be part of what’s offered at a dealership,” says Scot Hall, Swapalease.com’s executive vice president.

“From short-term mobile phone plans to pay-as-you-consume Netflix programming, consumers now are conditioned to tie larger investments in with their consumer habits, which may dictate the future of automobile shopping patterns and offers.”

Swapalease matches consumers who want to get out of their leases with people looking for short-term lease agreements. That business model indicates there’s a niche for 12-month leases, says G.P. Anderson, an F&I manager at Thielen Motors in Park Rapids, MN.

Hall says his company’s survey shows men and women differ on what vehicle they would want to lease for a year. Women prefer compact cars, hybrid electric vehicles and CUVs. Men go for luxury vehicles and sports cars.
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