Automakers’ lease residual values so far this year have shown stable to improved performance.
For example, Ford Credit and GM Financial — two regular auto lease asset-backed securitization (ABS) issuers — saw residual value gains of 14.2% and 7.1%, respectively, in 2026, Amy Sze, managing director of ABS research at JPMorgan Securities, said in an Aug. 28 research note.
Auto lease ABS sponsor residual gain/loss experience
Experts expect off-lease vehicle volumes, which feed the supply of late-model used vehicles at auto dealerships and auctions, to improve through 2027.
Off-lease supply is expected to rise to about 2.66 million vehicles in 2026 and 3.29 million in 2027 from about 2.15 million in 2025, with 18% of 2027’s supply expected to be EVs, according to the JPMorgan Securities report, which cites Experian estimates.
Lease vehicles returned as a percentage of lease terminations also rose to 40% in July 2026, up 12% year over year but lower compared with 67% prior to the COVID-19 pandemic, Sze said.
Used car availability shows signs of improving
Inventory availability is improving in auction lanes, Larry Dixon, vice president of auction data solutions at the National Auto Auction Association, told Auto Finance News.
Sales of 3-year-old vehicles, many of which are off-lease units, rose 13% YoY in the first seven months of 2026, Dixon said.
“If we look back at what happened with new vehicle sales in 2023 relative to 2022, we saw a substantial increase in new vehicle retail sales and lease originations,” Dixon said. “Roughly 80% of new vehicle leases are for a 36-month term, so just add three years to that.”
NAAA expects to see an escalation of off-lease volume — including used EVs — continue this year, Dixon said.
Lease penetration is forecast to remain low at 24% of new-vehicle purchases in 2026 compared with 34% before the pandemic, according to Experian estimates cited by JPMorgan Securities.
Still, the supply of late-model used vehicles will get a much-desired boost, Dixon said.
Depreciation a factor in trade-ins
A slower rate of used-vehicle depreciation would help consumers, especially those signing auto loans with longer terms of 84 months or 96 months, Dixon said.
It might check in at 12% to 14% YoY, which is lower compared with a historical rate of loss of 16% to 20%, he said.
That would allow consumers to “build equity faster, which will help additional new and used retail sales, which helps trade-ins, which helps the auction environment,” he said.
Auto Finance Summit, the premier industry event for auto lending and leasing, returns October 5-7 at Caesars Palace Las Vegas, featuring executive insights from institutions including Chase Auto, Carvana, Capital One, Hyundai Capital America and Wells Fargo. To learn more about the 2026 event and register, visit www.AutoFinance.live/AFS.
