It appears consumers’ desire for a luxury model and their financial capacity to take over a lease didn’t mesh together well last month.
Swapalease.com reported on Tuesday that vehicle lease credit applicants registered just a 48.1 percent approval rate during May, the lowest approval rate tracked by the company dating back to 2014, when the monthly approval ratings began.
Company officials pointed to a higher-than-normal influx of applicants looking to take over higher-end luxury leases, especially high-priced SUVs that come with payments ranging from $600 to $700 each month. Swapalease.com noted that applicants for leases in this price range usually result in higher declines from applicants failing to meet the credit requirements of the lease company.
Year-to-date, the vehicle lease credit approval rate has registered a monthly average of 61.1 percent, which compares to 67.7 percent for the same period last year. Over the last three months, the lease credit approval rate has averaged 62.1 percent.
“We’ve been tracking a rise in the number of people searching and attempting lease takeovers on higher-priced luxury SUVs recently,” said Scot Hall, executive vice president of Swapalease.com.
“With a healthy economy and moderate fuel prices, we believe people are feeling confident in obtaining a higher monthly vehicle payment each month,” Hall continued. “Unfortunately, their attempts aren’t always successful, especially if their credit just doesn’t match the appetite for their desired vehicle.”