Auto Exec: Production shortfalls making lease deals ‘less attractive’

From Swapalease.com

Production shortfalls are not only affecting the sale of new cars and trucks, but also affecting new lease deals, according to Scot Hall, executive vice president of Swapalease.com.

Here are his thoughts:

• In the early days of Covid-19 last year, production shortfalls plagued the industry because factories shuttered to keep workers safe from the illness.
• Today, production problems continue to plague the industry because of greater competition for technology and chips also used in electronics.
• Hall believes lease deals are less attractive today because of less supply, not necessarily because of financial problems that were felt during the Recession of 08-09.
• The Swapalease inventory of available leases for transfer consists of many pre-pandemic priced leases offering great value to current lease shoppers.
• Lease pricing could be better than ever post pandemic due to preowned values being up and how that will affect future residuals values and leasing in a positive fashion.

According to news reports: More than 50% of companies believe there will be a delay in upcoming vehicle technology and new product launches as a result of COVID-19, with lower sales and lower profits causing automakers to delay new products up to a year or more in an effort to reign in unexpectedly smaller research and development budgets.