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Leasing Decreased in Q3 2021, But Remains a Critical Option for Affordability

Published: January 11, 2022 by Melinda Zabritski

Young woman standing against glass window at car showroom

There is no doubt the automotive finance market continues to see impacts and shifts resulting from the pandemic. One of the changes we saw was a drop in leasing. While many trends have returned to pre-pandemic levels, leasing has not. In fact, it’s continued to decrease.

According to Experian’s State of Automotive Finance Market: Q3 2021 report, leasing comprised 24.03% of new vehicle financing in Q3 2021, compared to 27.62% in Q3 2020, and 30.51% in Q3 2019.

Some attribute the drop in leasing to consumers extending their current leases or purchasing their vehicles once the lease expires—a cost-effective way to purchase a vehicle, particularly amid rising prices. But while we don’t know the exact reasons driving the decrease in leasing, we do know that it continues to be a vital option for consumers looking for a lower monthly payment on a vehicle.

In Q3 2021, the average monthly lease payment was $506, compared to the average monthly loan payment for a new vehicle, which hit a record high of $617. With the average new vehicle monthly payment more than $100 higher, consumers shopping for a vehicle based on monthly payment may opt for a lease, rather than a loan.

For example, in Q3 2021, the Ford F150 had an average monthly lease payment of $542, while the average monthly loan payment was $768. Consumers also continue to opt for CUVs, such as the Jeep Grand Cherokee, which had an average monthly lease payment of $470, compared to the average loan payment of $608.

Consumers still choosing bigger vehicles

In recent years, consumers have been looking for larger, more expensive vehicles like SUVs, CUVs and full-size pickup trucks, and the pandemic has not altered these preferences at all, which is demonstrated by the top 10 vehicles leased in Q3 2021.

It is important to note that the Honda Civic was the top leased vehicle, accounting for 2.92% of leasing, but also the only sedan among the top ten—the rest being made up by SUVs, CUVs, and full-size pickups.

bar chart showing the top ten leased vehicles in Q3 2021

With consumers opting for larger and more expensive vehicles, leasing will continue to remain an important option for those looking to get a new vehicle with a lower monthly payment. It also has a large impact on the used vehicle market in the future—the leases of today are the used vehicles of tomorrow.

As we continue to see challenges like the inventory shortages, data can help dealers and lenders properly navigate their way through this evolving trend and help consumers choose the vehicle that best fits their budget and needs.

To learn more about leasing and other automotive finance trends, watch the entire State of the Automotive Finance Market: Q3 2021 webinar.

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Amid interest rates leveling out and some lenders reassessing go-to-market strategies, the automotive finance landscape is experiencing notable shifts in market share. According to Experian’s State of the Automotive Finance Market Report: Q1 2025, banks recouped some of their total finance market share for the first time in several years, reaching 26.6% during the quarter, up from 24.8% a year ago. On the other hand, captives’ total market share declined from 31.3% to 29.8% year-over-year and credit unions experienced a modest increase from 20.2% to 20.6%. Despite the overall market share shifts, captives continue to lead in new vehicle financing at 57.1% in Q1 2025, although down from 62.1% the year prior. Meanwhile, banks increased to 24.1% this quarter, from 20.4% in Q1 2024 and credit unions went from 9.6% to 10.9% during the same period. On the used side, banks and credit unions were grouped much closer together. Banks led the way with 28.4% of the used finance market in Q1 2025, up from 27.9% last year, while credit unions went from 27.7% to 28.2% year-over-year and captives declined from 8.5% to 7.4%. As market share movement continues to be a valuable indicator of shifting strategies and consumer behavior, it’s important for automotive professionals to keep a close eye on these shifts to uncover new opportunities while looking for ways to stay ahead of the rapidly evolving industry. Breaking down the latest finance trends Data in the first quarter of 2025 shows the automotive finance market continues to stabilize as automotive professionals gain clearer visibility into lender behavior and consumer demand. For example, the average loan amount for a new vehicle increased $1,110 year-over-year to $41,720 in Q1 2025. However, the average interest rate dropped from 6.9% to 6.7%, and the average monthly payment went from $737 last year to $745 this quarter. For used vehicles, the average loan amount saw a slight uptick of $90 year-over-year, reaching $26,144 this quarter. Meanwhile, the average interest rate declined from 12.4% last year to 11.9% this quarter and the average monthly payment trended lower at $521, from $524 in Q1 2024. Monitoring and leveraging market share shifts and financing trends can support strategic planning while empowering automotive professionals to anticipate consumer purchasing patterns and tailor conversations more effectively to meet buyers where they are during their car buying journey. To learn more about automotive finance trends, view the full State of the Automotive Finance Market: Q1 2025 presentation on demand.

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