CINCINNATI — Lease credit approvals during the month of February were at 66.6%, down from the 70.5% level in January and 73.3% level in December of 2013, according to data from Swapalease.com. February’s rate was the lowest since September of 2013, when the marketplace saw just 62.9% approvals from credit applicants.
So far in 2014, the credit approvals rate stands at 68.3% vs. a year ago, close to the level Swapalease.com considers “healthy” at 70%. Over the last 12 months, the credit approval rate has averaged 71.8%. February is typically a lower-than-normal month, though, with last year’s monthly approval rate clocking in at 60%, a marked improvement from the same period a year ago.
One demographic that continues to weigh down Swapalease.com’s credit approval rate are recent graduates. According to a report in Automotive News, 37 million Americans carried student loan debt in early 2012. And according Finaid.org, student debt reached $1.17 trillion last week, up from $1 trillion in 2012. All of this debt is making it more difficult for grads and their families to qualify for a car loan.
“Our 12-month average for lease credit approvals continues to trek above the ‘healthy’ benchmark, which shows the continued strength in the lease market,” said Scot Hall, executive vice president for Swapalease.com. “Credit is the lifeblood of leasing, though, so we’ll continue to keep a watchful eye on broader economic factors that could impact the monthly approval data.”