As used car prices have declined in recent years, consumers who chose leasing have saved thousands of dollars of depreciation

Association of Consumer Vehicle Lessors

Consumer Vehicle Lease Volume Down 14.5% in 2002 – Down 50% since 2000!

For Immediate Release

Contact: Rob Mize Bernard de Souza

President, ACVL Customer Satisfaction Committee Chair

615/467-1900 201/307-4016

Nashville, TENNESSEE. December 23, 2002. New lease volume for the period Jan. -Nov. 2002 for the largest national lessors declined 14.5% from the same period in 2001 according to a survey conducted by The Association of Consumer Vehicle Lessors (ACVL). A prior ACVL survey of the full year volume change from 2000 to 2001 found a 40% drop. When combined, these surveys indicate that there has been about a 50% drop in lease volume since 2000!

The results, announced today, showed member lessors purchased 2.07 million leases for the same 2001 period compared to 1.78 million YTD in 2002.

Although the overall 2001/2002 decline was 14.5%, the average respondent’s volume declined somewhat less, 10.5%. This would indicate that, on average, larger lessors had greater declines than smaller ones. Not all respondents had reduced volume: 29% of member lessors experienced an increase in volume averaging 25.6%.

Bank lessors saw their volume decline 19%, compared to 14% for manufacturer captive finance companies. “There were a number of factors contributing to lower lease volumes,” explained Rob Mize, ACVL President, “including the 0% manufacturer promotional loan finance rates and other very low interest rates, lower residual values (causing higher monthly payments), fewer manufacturer lease promotions, and the retraction of some bank lessor programs by withdrawing from some states and/or being more selective in approving lease applications.”

Exhibit 1

Jan. – Nov. 2001 vs. Jan.- Nov. 2002 New Lease Volume

	2001	2002	# Diff.	% Diff.	Avg. Unweighted New Lease Change	N
All Respondents	2,078,183	1,776,056	-302,127	-14.5%	-10.5%	18
Banks	388,379	314,747	-73,632	-18.9%	-25.9%	8
Captives	1,689,804	1,461,309	- 228,495	-13.5%	1.9%	10

Although the attention of consumers and dealers has shifted away from leasing, leasing still offers consumers a variety of advantages including:

Protection from continued volatility in used car prices and the possibility of unexpected depreciation;
Avoidance of the hassles of negotiating a trade-in value when the consumer wants a new vehicle;
Reduced sales tax in most states since the tax is only paid on the lease payments rather than the full price of the vehicle.

In addition to providing the vehicle return/walkaway option that protects consumers from unexpected depreciation, most leases offer a fixed price purchase option so that consumers can capture the “up side” (by trading or purchasing the vehicle at lease end) if depreciation is less than expected.

“With the sizeable reduction in lease volume, there will be many fewer vehicles in vehicle auctions 3 years from now,” notes Raj Sundaram, President of Automotive Lease Guide. “That increases the likelihood that used car prices may rebound creating an upside for consumers who lease their vehicles today.”

Consumers looking for further information on whether leasing or financing better meet their needs should visit the ACVL “Leasing vs. Buying Quiz” and the accompanying “Leasing vs. Buying” comparison. See ACVL.com.

The ACVL was founded in 1993. Based in Nashville, Tennessee, the ACVL is a national trade association for the largest manufacturer and import distributor captive finance companies, banks, and independent leasing companies whose primary goals include increasing consumer understanding of lease benefits and responsibilities through improved disclosure.