Car Prices Drop as Vehicles With Expired Leases Return To Dealerships

In recent auto market news, after leasing more than 28,000 Q50 luxury sedans in 2014, Infiniti is being flooded with vehicles whose leases are up. According to the Los Angeles Times, the leases made up more than 75% of overall Q50 sales.

As a result, Nissan is now facing an oversupply of luxury cars when SUVs are quickly becoming the vehicle of choice for many consumers.

Almost 40 million used cars are sold by private sellers and dealerships every year, but Infiniti tried — and succeeded — to boost newer car leases by offering lower monthly rates. About 43% of people are financing their vehicle, so affordable leases are majorly appealing to many who otherwise may not have had the budget for such a luxury vehicle.

Jim Lentz, Toyota’s North America chief executive, said that prices are expected to fall because the current market favors trucks and SUVs.

“It’s more difficult to get rid of them,” he said. “You’re going to have very attractive certified used passenger car payments relative to new passenger cars.”

Of course, another factor in overall vehicle appeal is environmental impact. There are over 11 million road vehicles worldwide that run on natural gas as a fuel, and vehicles that get good gas mileage are seen as wise investments because of gas savings alone. Aggressive driving can lower gas mileage by 33% on the highway and 5% in the city, so cars with better mileage may be especially appealing to those who mainly travel on the highway.

Regardless, industry experts think it’s plausible for the price of SUVs to plummet in coming years before eventually re-stabilizing, due to their current leasing rates.

Others remain confident that prices will remain at their current rate. Paul Ritchie, who runs a Honda dealership in Hagerstown, Md., said that he has recently met with other dealers to discuss market fluctuations and determined that they haven’t yet seen a big decline.

“We just don’t think it’s going to drop that much,” he said. “Most of the dealers in our group are looking to buy used cars.”

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