Lease return volume shot up 48% year over year to 62,000 units for Ford Motor Credit Co., according to the company’s second-quarter earnings released yesterday. On the heels of 3% lease origination growth — to 106,000 units last quarter — the captive reported higher vehicle return rates. Specifically, 77% of lessees returned their vehicles at lease term, up from 70% in second quarter of 2015.
In an earnings call this morning, Ford Credit Chief Executive Bernard Silverstone noted that Ford’s lease share was 23%, below the industry average of 31%. Meanwhile, loss severity is closing in on $10,000 per vehicle for the captive. Ford Credit averaged a $9,900 loss on each of the 7,000 vehicles it repossessed last quarter, up from $8,600 per vehicle in the year-prior period. The captive attributed the higher severity to lower auction values, higher balances at repossession, and larger amounts financed.
