Are you going to be in the market for a car in the near future? If you can accept “new for you” instead of “new” and you don’t have your heart set on a truck or SUV, you may be in luck: Used car dealers are about to find themselves awash in 3- and 4-year-old vehicles.
Why? Because after the last recession, leasing a new vehicle became more popular as manufacturers offered deals and customers shied away from traditional auto loans. As that first major wave of leases expires, these low-mileage cars are being turned back in and going out onto dealer lots.
How many? For an example, the The Associated Press points to Infiniti, Nissan’s luxury sibling brand. In 2014, the brand leased 28,000 Q50 model sedans at low prices, which was more than 75% of the Q50s produced. Since the typical lease for these cars is three years, many of those 28,000 vehicles will be up for sale as used cars. And that’s just one model from one car company.
This all seemed like a good idea at the time, because sedans were holding their value pretty well three years ago. Automakers could collect lease payments for a few years, then turn around and re-sell the vehicle as “certified” to another buyer interested in a new-ish car.
Toyota put the brakes on low-price leasing in 2015, but other automakers didn’t see the leasepocalypse coming until the beginning of 2017. That means that it will still have lots of returned Yarises, Priuses, and Camrys to unload.
“It’s more difficult to get rid of them,” the CEO of Toyota North America told the AP. “You’re going to have very attractive certified used passenger car payments relative to new passenger cars.”
Now, though, car shoppers are more interested in trucks or SUVs thanks to low gas prices, and experts predict that you’ll will be able to get great deals on other kinds of off-lease vehicles in the coming years. If you want a lease on a sedan, those may become more expensive if automakers and dealerships can stifle their impulse to compete with each other.