FI showroom red and grey logo
MenuMENU
SearchSEARCH

Leasing Normalizes, Partly Due to EV Transactions

Volume reached near prepandemic levels in the second quarter.

August 1, 2024
Leasing Normalizes, Partly Due to EV Transactions

Federal tax credits are available for EV leases, a factor in that slice of the growing lease pie.

Credit:

Pexels/Atilla Darvas

2 min to read


Auto leasing is making a comeback after falling sharply during the Covid era, according to a new report, thereby providing more used vehicles down the line to help meet growing demand by cost-crunched consumers.

The TransUnion research shows that in the 12 months ended in the first quarter leasing volume rose from 539,000 units to 714,000. That’s closing in on the 781,000 leased in the first quarter of 2020, at the end of which the pandemic took hold in the West.

Ad Loading...

The return of normal leasing volume is being driven in part by electric-vehicle leases, the study found. EVs made up about 17% of leases in the second quarter, up from 11% two years earlier, TransUnion said. In fact, more auto consumers are leasing EVs than are financing them. It said almost half of second-quarter EV originations were leases, over twice the level three years earlier, while financed EV transactions were down to a third.

“Multiple factors have contributed to this, but two of the most significant include an increase in lower-priced models being introduced, as well as more new dealer leasing incentives on EVs,” said TransUnion auto and mortgage business leader Satyan Merchant.

Federal tax credits are available for EV leases, TransUnion pointed out. In fact, leases have been exempt from restrictions on eligible vehicle models related to where their battery materials are sourced. The Inflation Reduction Act that authorized the credits treats leased vehicles as commercial and therefore exempts them from such restrictions.

The report pointed out that there’s room to grow leasing further. It said just 30% of lessees are leasing for the first time, down slightly from 33% in 2019.

“… many consumers who may be looking for a pre-owned vehicle later in 2024 and into 2025 may find fewer lease returns resulting in a smaller inventory,” Merchant said. “That’s a group that dealers should consider trying to turn into first-time lessees and should aggressively market towards.”

Ad Loading...

More Industry

Industryby Lauren LawrenceFebruary 27, 2026

Audi of America Gains New Exec

According to board member Marco Schubert, the German automaker 'is well positioned to enhance its competitiveness in both North America and China,' and part of that includes management shifts.

Read More →
F&Iby Lauren LawrenceFebruary 25, 2026

Report Finds Year-End F&I Strength

Deal volume ebbed and flowed throughout 2025, but product performance remained steady, according to automotive technology and data intelligence solutions provider StoneEagle.

Read More →
Auto Financeby Lauren LawrenceFebruary 23, 2026

Auto Loan Forecast Bucks Market Trend

Auto loan originations rose over 6% year-over-year in the third quarter of 2025, but TransUnion predicts a slight decline in auto loan growth this year, making it an outlier in the company's overall lending forecast.

Read More →
Ad Loading...
Industryby Lauren LawrenceFebruary 23, 2026

Auspicious in Alabama

Valuing employees, growing wisely, keeping up with tech, and contributing to stores’ communities cultivate success.

Read More →
F&Iby Hannah MitchellFebruary 23, 2026

Some Auto Brands Cheaper to Insure

A new top 10 list ranks the least expensive for average full insurance coverage on a clean driving record and high driver credit scores.

Read More →
Industryby Hannah MitchellFebruary 18, 2026

EVs Bring Most Satisfaction to Date

Study finds that adopters are true believers and that their satisfaction with the vehicles is growing, including for public charger experience, despite pullback of federal incentives.

Read More →
Ad Loading...
Industryby Lauren LawrenceFebruary 18, 2026

Cyber Risks Span Systems

VicOne found that 33% of observed cyber risk now directly impacts driver-facing systems, such as infotainment, network and embedded software, and leading to greater customer impact.

Read More →
IndustryFebruary 11, 2026

Beginning the Tax Year Right

Auto dealers can boost their business wealth by applying these tax-efficient F&I participation structures this year.

Read More →
Industryby Lauren LawrenceFebruary 11, 2026

Insurance Shopping on the Rise

A TransUnion study found that relationship-driven sales models proved to be important, as consumers who used an agent had a lower shopping intensity than those going it alone.

Read More →
Ad Loading...
Auto Financeby Hannah MitchellFebruary 11, 2026

Auto Credit More Plentiful

Growing access shows greater lender appetite for risk as consumers take on heavier debt burden in an inflated market.

Read More →