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Leasing Remains a Crucial Option for Affordability

Published: March 9, 2021 by Melinda Zabritski

Car Dealer Showroom Display

While automotive leasing has taken a bit of a hit over the past year, it remains a staple choice for consumers looking to meet a variety of needs outside of standard loan options. So, what can current trends tell us about the state of the leasing market?

According to our Q4 2020 State of the Automotive Finance Market report, 26.45% of all new vehicles are leased, down from 30.64% in 2019. Of consumers choosing to lease, prime and super prime consumers choose to do so most frequently, with 33.57% of them choosing this option over loans. Further, prime consumers make up almost 50% of all new leases.

Average Monthly Payments and Terms Remain Steady

Affordability remains a top concern for many vehicle shoppers, making leasing an enticing option.

The average monthly lease payment in Q4 was $460, reflecting minimal changes compared to the Q4 2019 average of $462. In comparison, the average monthly payment for new loans increased more than $10 since last year, now averaging $576, up from $563 in Q4 2019.

Top Leased Makes and Models

When looking at top leased new makes, Honda maintained its lead in Q4, accounting for 11.60% of all leased new vehicles. Following them was Toyota (11.16%), Chevrolet (9.21%), Jeep (5.47%) and Ford (5.41%). Meanwhile, the top leased models were comprised of a mix of cars, trucks and CUVs, with the Honda CR-V (2.69%) at the forefront, followed by Honda Civic (2.53%), Toyota RAV4 (2.44%), Chevrolet Silverado 1500 (2.13%) and Chevrolet Equinox (1.99%).

Since trucks and larger vehicles typically come with higher monthly payments, it is not too surprising that they rank highest for top leased vehicles, as consumers look for ways to make financing a vehicle more affordable. The average monthly payment for the top leased models were all under $400, except for the Chevrolet Silverado 1500, which had an average monthly payment of $455. By comparison, the average monthly loan payment for the same five models were all over $400 with the Chevrolet Silverado 1500 coming in highest at $638, and the other four models making up a combined average monthly payment of $452.

While leasing may have decreased over the past year, it is a financing option consumers are still looking to take advantage of. And as new vehicle inventory increases, we could see leasing increase in the coming months. By staying close to the trends, lenders and dealers can guide sales expectations and inform their strategy in an increasingly dynamic market.

Learn more by watching Experian’s full Q4 2020 State of the Automotive Finance Market report.

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In an ever-evolving automotive landscape, where shifting consumer behavior meets fluctuating market dynamics, Experian’s State of the Automotive Finance Market Report: Q2 2025 delivers key insights into how both consumers and professionals are adapting to the changes. This quarter’s report revealed a sharp increase in vehicle refinancing—up nearly 70% from Q2 2024—as consumers capitalized on the more stable rate environment. In fact, after refinancing, the average interest rate went from 10.45% to 8.45%. That shift resulted in their monthly payment dropping by an average of $71. Interestingly, credit unions played a significant role in the refinance surge, increasing their market share from 63.22% last year to 68.33% this quarter, and borrowers who refinanced through credit unions saw their monthly payments decrease by $87 on average. Banks saw a slight dip in their share of the refinancing market year-over-year, going from 22.71% to 21.45%, and borrowers who refinanced through them saved an average of $46 a month. New leaders emerge as the lender market share continues to evolve Taking a deeper dive into the automotive finance market share, banks reclaimed their leading position for total vehicle financing, rising to 27.50% in Q2 2025, from 24.50% in Q2 2024. Meanwhile, captives declined from 30.17% to 26.63% year-over-year, and credit unions slightly increased from 20.35% to 21.04% during the same period. For new vehicles, captives continued to lead at 52.39% this quarter, though it was a drop from 60.74% last year. On the other hand, banks grew from 21.12% to 25.91% and credit unions went from 9.99% to 12.24% in the same time frame. On the used side, banks edged ahead, increasing their share to 28.59% in Q2 2025, from 26.80% last year. Credit unions saw slight growth from 27.59% to 27.63%, while captives declined from 7.83% to 6.40% year-over-year. As affordability remains a key priority, consumers seem to be exploring financing options that offer more favorable terms. While Experian Automotive’s report continues to illustrate the evolving dynamics, these data-driven insights can empower both consumers and industry professionals to make smarter financial decisions. To learn more about automotive finance trends, view the full State of the Automotive Finance Market Report: Q2 2025 presentation on demand.

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Without data, anticipating buyer behavior in the months ahead can be challenging. While some OEMs had record sales¹ this spring, it remains critical to identify who’s in the market—whether to purchase or service their vehicle. With tax refund season in the rearview mirror and summer promotions approaching, consumers may be weighing their next move. Some could have “one foot in the showroom door” while others are waiting to see which dealer delivers the most compelling offer. Meanwhile, 41% of drivers choosing to keep their vehicles longer² are likely focused on maintaining them. So how can you best position yourself?  Explore These 3 Strategic Moves to Navigate This Summer:  Firm up your Service Marketing Plan: With summer road trips on the horizon, your customers may be in the market for services like A/C repair, wheel alignment, tire rotation, engine cooling, oil changes, multi-point inspections, and more. Discover who’s most likely to need service in the next 30–60 days with Experian Automotive’s AutoAudiences. Understand Customers’ Communication Preference: To effectively target your audience, start by understanding how they would prefer to communicate. As Car Dealership Guy puts it, “The shift in consumer preferences is undeniable and generational.”³ Experian Automotive’s Product Management Director, Kirsten Von Busch echoes this, adding, “Understanding generational differences is crucial to developing effective marketing strategies that resonate with each group’s unique preferences”. Experian’s Automotive Consumer Insights support this approach with data-driven messaging and communication channel recommendations.  Focus on Growing Market Share with Mid-Year Auto Trends: Two purchase types that are trending in the beginning half of the year include Leasing⁴ and Trade-In. Whether you have EVs or AWD vehicles on your lot, consider (A)ll (W)eather (D)eals that can (1) Supersede those in your backyard as part of your Conquest strategy and (2) Build upon your “Why Buy” dealer loyalty.  Experian Marketing Engine powers automotive marketing by helping automotive marketers identify the right audience, uncover the most appropriate communication channels, develop messages that resonate and measure the effectiveness of their marketing activities. Timing is everything, so start Targeting and Conquesting in your Market today!  Sources:  http://www.autonews.com/retail/sales/an-april-us-sales-2025-0501/  https://news.dealershipguy.com/p/3-real-time-shifts-in-car-buying-behavior-post-tariff-announcements-2025-05-01  https://news.dealershipguy.com/p/dealers-are-saving-thousands-in-labor-in-fixed-ops-2025-05-30 https://www.experian.com/blogs/insights/auto-the-current-state-of-ev-financing-why-more-consumers-are-choosing-leasing/

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