Dubai, UAE, March 14, 2023 (GLOBE NEWSWIRE) -- According to the latest market research report by Extrapolate, it has been anticipated that the global Auto Leasing Market is projected to reach USD 195.74 billion by 2032 from USD 88.35 billion in 2022 at a robust CAGR of 8.2% during the forecast period 2023-2032.
The future of global auto leasing industry is likely to be shaped by several factors, including changing consumer preferences, technological advancements, and regulatory developments. As electric vehicles continue to gain popularity, it is expected that more leasing companies will offer EV models for auto leasing. Additionally, subscription-based models are gaining traction, compelling traditional leasing companies to reshape their business models to remain competitive.
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Researchers at Extrapolate predict that the advancements in autonomous driving and connected car technologies are likely to impact the auto leasing industry. As these technologies continue to become more prevalent, leasing companies may begin offering integrated services and features that cater to the needs of tech-savvy consumers.
Regulatory developments may also play a vital role in shaping the future landscape of the auto leasing market. For instance, changes in emissions regulations or fuel economy standards may impact the types of vehicles available for lease. Additionally, changes to consumer protection laws or leasing regulations could impact the way leasing companies operate and interact with customers. For instance, the government of Thailand has allowed the Bank of Thailand to regulate the auto leasing market to reduce burgeoning household debt and protect consumers.
"At the end of the day, leasing is a great solution for customers that want to try it out, that might be afraid of some of the residual value pieces," said CFO Paul Jacobson of General Motors. "Lease is going to be a very valuable tool especially across EVs."
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Key Insights
- In the United States, auto leasing accounted for 34% of new car sales in 2022, up from 28% in 2018, according to Edmunds, a car leasing platform.
- In Europe, leasing accounted for 29.4% of new car sales in 2022, up from 18.4% in 2011, according to the European Automobile Manufacturers Association.
- Electric vehicles (EVs) are becoming increasingly popular in the auto leasing market. The share of EVs in the global passenger car leasing market is projected to grow from 9% in 2022 to 28% in 2030.
- In the U.S., the average lease payment for a new vehicle in 2021 was $467 per month, up from $450 in 2020, according to Experian.
- In China, the world's largest auto market, the leasing industry is growing rapidly. The total value of auto leasing contracts in China reached CNY 300 billion (USD 46.5 billion) in 2021, up from CNY 80 billion in 2015, according to the China Association of Automobile Manufacturers.
- In addition to traditional leasing, subscription-based models are also gaining popularity in the auto leasing market.
Competitive Landscape of Global Auto Leasing Market
The competitive landscape of the auto leasing market is dynamic and constantly evolving, with new players entering the market and established companies adapting to changing consumer preferences and technological advancements. While traditional leasing companies continue to dominate the market, the growth of online platforms and subscription-based models may have the potential to disrupt the industry and further drive innovation in the years to come. For instance, in February 2022, Mitsubishi HC Capital and ALD collaborated for the launch of a fleet management venture that aims to leverage the strengths of both companies and provide mobility solutions to corporate firms around the globe to maintain its market position.
Key Players Covered in the Report
- ALD SA
- Arval Service Lease
- EASIRENT
- EUROPCAR
- LeasePlan
- Green Motion International
- ORIX
- SIXT
- The Hertz Corporation
- Zoomcar
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Market Segmentation by Lease Type
- Open-end
- Close-end
Open-End Lease Segment to Exhibit Maximum Growth During Forecast Period
The auto leasing market is growing substantially, and the open-end lease segment is expected to dominate due to its popularity in enabling users to avoid vehicle depreciation risk. With each passing year, it is becoming increasingly popular for commercial transactions, allowing operators to use the vehicle as they see fit, and offer flexible mileage terms. The transparency of the financial stability of the leasing company, gauged rates for automotive leasing, and the shorter duration of open-end leases for commercial entities are all factors contributing to the growth of the open-end lease segment. The Consumer Leasing Act of 1976 regulates open-end leases, ensuring accurate disclosure of lease terms to customers, which has boosted user confidence.
Market Segmentation by Application
- Personal
- Commercial
Commercial Segment to Retain Largest Share of the Auto Leasing Market
In terms of application, the commercial sub-segment is projected to capture the highest revenue share owing to the rising preference for leasing commercial fleets for commuting purposes in the auto leasing market. Moreover, a survey conducted by the National Vehicle Leasing Association (NVLA) found that the commercial leasing market grew by 5.5% in 2022, reaching a total of 1.98 million leased vehicles. This growth of corporate auto leasing can be attributed to several factors, including the increasing cost of purchasing and maintaining a fleet of vehicles, the desire for companies to improve their cash flow, and the flexibility of leasing contracts.
In terms of the type of vehicles being leased, it was found that SUVs and pickup trucks were the most popular choices for commercial leasing, followed by sedans and vans. This trend can be attributed to the increasing demand for these types of vehicles in the commercial sector, as they are often utilized for transportation and delivery services. In addition to this, average lease term for commercial vehicles is usually 36 months, with an average annual mileage of 19,184 miles. This indicates that companies are preferring shorter lease terms to keep up with technological advancements and changing business needs, and they are also using the leased vehicles for high-mileage activities.
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North America Projected to Retain Dominance in Global Auto Leasing Market
Research analysts at Extrapolate have projected that North America is expected to lead with the largest revenue share of 30% during the forecast period. North America is projected to prosper at a healthy CAGR of 6.75% with the rising adoption of smart mobility in the region. The North American auto leasing market is driven by the increasing cost of purchasing and maintaining vehicles, with the average new car loan amount in the US reaching $41,665 in Q3 2022, up 7% from the previous year.
The passenger cars segment dominates the market with over 60% of revenue, while the commercial vehicles segment is expected to experience the highest growth rate due to the increasing demand for last-mile delivery services. A survey by Cox Automotive found that 36% of new vehicles sold in the US in 2022 were leased, with an average lease term of 36 months and monthly payment of $467. Luxury vehicles had the highest lease penetration rates, with 63% of new luxury vehicles being leased in 2022.
Table of Content
Chapter 1 Executive Summary
Chapter 2 Research Methodology
Chapter 3 Market Outlook
Chapter 4 COVID-19 Impact on Auto Leasing Market
Chapter 5 Global Auto Leasing Market Overview, By Lease Type, 2018 - 2032 (USD Million)
Chapter 6 Global Auto Leasing Market Overview, By Application 2018 - 2032 (USD Million)
Chapter 7 Global Auto Leasing Market Overview, By Vehicle Type, 2018 - 2032 (USD Million)
Chapter 8 Global Auto Leasing Market Overview, By Geography, 2018 - 2032 (USD Million)
Chapter 9 North America Auto Leasing Market Overview, By Countries, 2018 - 2032 (USD Million)
...
Chapter 14 Competitive Landscape
Chapter 15 Key Vendor Analysis
...TOC Continued
Start-Ups Landscape in the Global Auto leasing Market:
- FairLease is a California-based company that offers flexible car leasing options through its app. As of January 2023, the company has raised over $2 billion in funding since its inception in 2016, including $500 million in a funding round led byMizuho Bank in 2019 and over $385 million led by SoftBank.
- CarNext is a Dutch start-up that offers high-quality used cars for lease through its online platform. The company has raised approximately $585 million in funding, including €450 million in a 2020 funding round led by French investment firm Eurazeo.
- Drover is a UK-based start-up that offers flexible car subscriptions and leasing options through its platform. As of January 2023, the company has raised over $25 million in funding, including $24 million in a 2019 funding round led by London-based venture capital firm Target Global.
- FlexClub is a South African start-up that offers peer-to-peer car leasing through its online platform. The company has raised over $5 million in funding, including $3 million in a 2020 funding round led by US-based venture capital firm CRE Venture Capital.
- Carsome is a Malaysian start-up that offers online car buying and leasing options through its platform. The company has raised over $300 million in funding, including $170 million in a 2021 funding round led by US-based investment firm Fidelity Management & Research Company.
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