Lease experts report a shift from luxury sedans to crossovers. However, one model may reverse the trend.
Vehicle leasing experts have reported a shift in consumer interest away from luxury sedans and toward crossovers. Premium sports sedans like the BMW 3 Series have been a mainstay of leasing companies for decades. Luxury and premium brands have created a lease and pre-owned “ecosystem” around the success of leasing pricey sedans to businesspeople and well-heeled private owners who want a fixed cost of ownership, and who want to drive a new car. Or should we say, “new vehicle?” Like with vehicles in general, the tide has turned for sedans. They are no longer the most desirable models as more and more shoppers now prefer crossover models.
Swapalease.com is a company that does just what it sounds like it might. It offers folks who want to get out of a lease a way to do so and provides great lease deals on the ones given up. Each month the company provides a very detailed look at general leasing trends. This month, the study found that when asked what type of lease interested shoppers would most likely want to drive next, only 11.2% of consumers listed luxury sports sedans That is down from 17.7% a year earlier. So, what type of vehicle is replacing the luxury sedan? More than a third (37.7%) of those asked said they would be in an SUV/crossover next. That number is up from 29.9% a year ago.
BestRide spoke with Scot Hall, Executive Vice President of Swapalease and asked him if this change in driver preferences is new or if it has been developing for a while. He said, “Nobody who follows lease trends is surprised to see that SUVs are becoming more popular.” He added, “However, the luxury sports sedan has been a staple of leasing for decades, and this new data is yet another indication that the American appetite for vehicles continues to march toward SUVs and crossovers of all sizes.”
Although the premium sports sedan market is losing mindshare among those who lease, there is one wildcard in the industry right now that may reverse the trend. At least for a while. Tesla’s Model 3 has taken over the American market for what was once called the “BMW 3 Series segment.” Tesla has now outsold all of its peers in the segment for twelve months straight. The Model 3 has had months where it outsold entire premium brands. Up until now, Tesla Model 3 cars were not available for lease. Tesla was only selling them directly to owners, many of whom waited years to take delivery.
That changed just this past month. Tesla has announced that it will begin leasing Model 3 cars. Hall says, “Our customers have been wanting a Model 3 lease from Tesla for a while now, and the quality of their vehicle makes a lot of sense financially for a lease, especially when you consider the fact that people want to change electric vehicles more frequently and Teslas do a great job in vehicle retention.” Hall also points out that, in general, electric vehicles are driven fewer miles per year than are liquid-fueled cars. That works nicely with leases that are more affordable when the annual mileage is below average.
Tesla’s new lease option for the Model 3 is poised for success. However, Scot Hall noticed something in the fine print of Tesla’s lease. There is no option to purchase the vehicle at lease end. Instead, Tesla plans to bring those off-lease cars back home to prepare them for use in a ride-share endeavor. Hall told BestRide that he could only remember one other vehicle lease like this. GM’s EV1 from the 1990s. This new lease deal could reverse the shift of leases to crossovers. But not forever. Tesla’s next model on the horizon is a crossover priced similarly to the Model 3.