Off-lease vehicles have been climbing in recent years, causing a downward pressure on used pricing. However, this influx of off-lease vehicles provides a new opportunity for mobility-as-a-service providers.
The rising popularity of leasing has resulted in a higher-than-average inventory of used vehicles returning back to car lots. Data also shows that as residual values drop, MSRPs have continued to rise at a disproportionate rate — meaning that, on average, a three-year-old used vehicle is sold for $1,200 less than the market anticipated when the car was new, according to a published report.
Some OEMs have found ways to offset the mounting number of cars returning to lots by funneling them into various mobility services. And these mobility companies have found off-lease vehicles to be a convenient and inexpensive source to add vehicles to their platforms.
Mobility Finance took a look at how General Motors, Uber, Lyft, and other players are working with off-lease vehicles. Here are four mobility companies using — or in the market for — off-lease vehicles:
1. Maven
Maven, owned by General Motors Co., uses off-lease vehicles from General Motors Financial, including the 80 vehicles used in the recent expansion to New York City. To date, Maven operates in Boston, Chicago, Los Angeles, and 14 other cities.
2. Drover
London-based Drover is currently in talks with automakers and captives to list off-lease vehicles on its car rental marketplace platform for rideshare drivers. Founded in 2016, the company offers consumers a new kind of car rental experience targeted at rideshare drivers who typically only need the vehicle for a year or less. The startup’s business model sits in between a classic three-year lease and a regular rental car company.
3. Lyft Express Drive
General Motors has found an appropriate niche for its off-lease vehicles in Lyft Express Drive, its rideshare leasing partnership with Lyft. Off-rental vehicles are being leased to Lyft drivers so that GM doesn’t cannibalize its own new-vehicle sales.
4. Uber Vehicle Solutions
General Motors also works with Lyft rival, Uber, by leasing Maven vehicles to Uber drivers through Uber Vehicle Solutions. Since Maven uses off-lease GM vehicles, this extends to Uber’s program as well. The program, launched in 2016, was offered because about 15% of people who signed up to drive lacked a qualifying vehicle, according to Uber.
