Lessor Cal Auto eyes Florida expansion

Indirect auto lessor Cal Automotive is focused on growing its lease share in Florida as leasing industrywide continued to climb in the fourth quarter. Yardville, N.J.-based Cal Auto is a subsidiary of used-car dealer group Auto Lenders , originates leases through dealerships. Cal Auto is looking to grow its portfolio to $2 billion this year, President David Slobotkin told Auto Finance News . Cal Auto’s lease portfolio sits at around $1.7 billion, he said, noting that the company originates between $70 million and $80 million in leases monthly across about 1,800 transactions. It is looking to raise that to 2,000 transactions by the end of March. “Lease penetration has picked up recently with rates being higher,” Slobotkin said. “The leasing market is robust right now and we think 2025 is going to be a strong year for Cal on the lease side.” Lease share climbs Lease share as a percentage of new-vehicle purchases rose to 24.5% in the fourth quarter of 2024 compared with 22.6% a year prior, according to Experian ’s Q4 State of the Automotive Finance Market report. Lease share of new-vehicle purchases Q4 2024 [caption id="attachment_58349601" align="aligncenter" width="1585"] (Courtesy/Experian)[/caption] More than 30% of consumers in the prime credit segment opted to lease in Q4 , up from 28.5% in Q4 2023, according to Experian. The average monthly payment difference between a financed vehicle versus a leased vehicle in Q4 was $142. The average monthly lease payment for super prime borrowers was $603 in Q4, down from $611 a year ago. Lease share in 2024 steadily hovered around 24%, Melinda Zabritski , head of automotive financial insights at Experian, told AFN . “A large portion of the increase [in lease share], especially toward the second half of the year, was the impact of increased EV sales ,” she said, noting EVs made up about 20% of the total lease market in Q4. EVs made up 9.3% of new-car purchases in Q4, with leasing accounting for 50.1% of EV purchases, according to Experian. Eyes on Florida The states with the highest lease share in Q4, according to Experian, were: Michigan at 55.5%; New Jersey at 47.3%; and New York at 47%. Cal Auto’s priority is growing lease share in Florida . The company has one retail location in Palm Harbor, Fla., and is working to identify a site for a second operation in the state, Slobotkin said. Cal also has six locations in New Jersey and three in Pennsylvania. “There's a great opportunity [in Florida],” he said. “There are pockets of Florida with high lease penetration and it’s a major growth market.” The percentage of new vehicles leased in Florida rose 7.4% YoY in Q4 2024 to 29.6%, according to the Experian data. [caption id="attachment_58349600" align="aligncenter" width="1024"] (Chart/Auto Finance News | Source/Experian)[/caption] Flowing supply Since Cal Auto originates low-mileage leases, those vehicles provide a supply of used cars for Auto Lenders , Slobotkin said. “Eighty percent of our leases are 10,000 mile per year leases or 7,500 mile per year leases,” he said. “When the vehicles come off lease, they typically have 25,000 to 30,000 miles on them, and what that creates in the used-car market is what's called ‘gold’ as inventory.” Growth in Florida will support that inventory cycle, Slobotkin said, noting that 90% of the 3,000 vehicles in Auto Lenders’ inventory are off-lease cars from Cal Auto. “To feed our Auto Lenders retail locations in Florida ... we have to be generating upwards of 500 to 1,000 transactions in that Florida marketplace alone,” he said, adding that Cal’s goal is 750 transactions per month in the region. Funding growth Cal Auto agreed to a deal with alternative asset manager Ares Management in October 2024 in which Ares will purchase up to $1.5 billion in prime new-vehicle leases originated by Cal, according to a joint release. Ares, which has more than $250 billion of assets under management, is looking to buy auto paper , Felix Zhang , a partner in Ares Credit Group, said at SFVegas last month. The money will support Cal’s originations growth and expansion in existing and new markets, Slobotkin said. “[Ares] provides us with unlimited growth potential in the lease markets we operate in, which are New York, New Jersey, Pennsylvania, Massachusetts and Florida,” he said. “Having low-cost funding at 100% advance rate is imperative to support our growth.” Cal also is funded by banks including Valley Bank , M&T and PNC, and taps private securitization transactions , Slobotkin said. “We have different sources of capital. It’s billions of dollars available to us to support our growth,” he said. Auto Finance Summit East 2025 is set for May 12-14 at the JW Marriott Nashville featuring fireside chats with Santander Consumer USA and Chase Auto. Visit autofinance.live for more information. Early-bird registration is available here .

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Lessor Cal Auto eyes Florida expansion

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