⚡ Market Pulse: Leasing is growing— but roadblocks like perception and messaging persist

Hey everyone. Our first *consumer-only* survey on how shoppers are reacting to tariff news just wrapped.

Want a seat at the table for the next one? Let us know…

In the meantime, let’s talk leasing. And what dealers are really seeing on the ground.

— CDG

First time reading the CDG Newsletter? Subscribe here.

Welcome to the CDG Market Pulse—your no-fluff cheatsheet to auto retail, built to help dealers price right, stock smart, and stay ahead.

⚡ More cars are being leased primarily for the appeal of lower monthly payments.

Leasing is steadily recovering from hits taken during the pandemic, with 1 in 4 vehicles leaving the lot on a lease, according to early Q1 estimates shared by Experian Automotive.

And it’s not hard to see why.

When buying feels out of reach, leasing becomes the fallback option—a trend that's likely to strengthen if tariffs raise vehicle costs.

⚡ Monthly lease payments are holding at $589, about $150 cheaper than a typical auto loan.

Experian’s early Q1 estimates put average lease payments at $589/month—$150 cheaper than the average new loan payment ($739, per Cox Automotive).

That’s $9 bucks cheaper than last year.

Meanwhile, new car loans? $739 in March, according to Cox Automotive.

Source, price, market, and sell more with CarGurus

Maximize your performance on CarGurus, the #1 most visited car shopping site (1). With solutions to help you source, price, market, and sell, CarGurus will help drive revenue at every stage.

The CarGurus difference:

• #1 ROI among listings sites* 

• #1 most visited listings site with 40M monthly visits (1)

• 53% of all attributed US vehicle sales are influenced by CarGurus (2)

Sources: *Marketprobe, blinded survey of 628 dealers, Aug 2024. Based on 313 dealers who pay for at least two listings sites. 1. Similarweb, Traffic Report (Cars.com, Autotrader, TrueCar, CARFAX Listings (defined as CARFAX Total visits minus Vehicle History Reports traffic), Q4'24, USA. 2. Clarivoy study of 800K attributed sales from Feb'23 through Jan '24. See here for more details: https://dealer.cargurus.com/clarivoyclaims

⚡ Leasing is driving EV sales, but the lucrative tax credit is likely living on borrowed time.

Leasing is driving EV sales—with 57.5% of EVs leaving lots on a lease so far in Q1.

No surprise there. Buyers are using tax credits to dodge elevated MSRPs.

But incentives can change without notice, tariffs are expected to raise EV prices, and the current lease advantages buyers rely on may not be available in the coming months.

⚡ Tesla is leading the leasing market—but value brand SUVs and trucks are gaining momentum.

Tesla’s Model Y and Model 3 are leading new leases with 3.7% and 2.8% market share, according to Experian.

But it’s not just EVs—CR-Vs, Tacomas, and Equinoxes round out the top five, showing that buyers are prioritizing lower costs in every segment.

Leasing is trending up in Q1.

But after talking with retailers, the main roadblock is customer perception.

As Andrew Cornelius, AVP of Automotive Finance at Genpact, put it: buyers—and even some dealers—still see leasing as confusing or risky.

But the reality is different. In a market where tariffs could drive up costs, leasing protects buyers from price drops and negative equity.

That same perception gap came up in my chat with Andy Wright, Managing Partner at Vinart Dealerships.

His take? Lease growth is “stubbornly low” right now—even with affordability pressures rising.

Mike McVeigh’s team has noticed it too—that’s why his team ditched the word “leasing” altogether and uses “payment management” when talking to buyers.

No gimmicks. Just direct communication.

And it’s a shift he says helps his team connect more clearly with buyers—while maintaining a strong 75% lease share.

The takeaway is clear: dealers have an opportunity to reposition leasing as a simple, flexible payment tool—but it starts with cutting out confusion and selling real value.

Leasing is back—and it’s the best tool dealers have to keep buyers in the game as payments climb.

If I were running a store today, here’s where I’d focus:

• Leverage OEM lease cash, loyalty offers, and dealer programs to keep payments sharp—ideally under $500/month where it makes sense.

• Offer flexible lease lengths, but don’t default to giveaways—match terms to real buyer needs.

• Push low upfront costs—like first-payment-only or $0 down—where you can still protect your backend profit.

• Structure leases around how buyers actually drive—keeping payments tight without locking yourself out of the deal.

Not a catch-all—but when it fits, it closes cleaner and keeps buyers coming back.

Agree? Think there’s a better play? Let’s hear it.

Thanks for reading everyone.

— CDG