A recently released Association of Consumer Vehicle Lessors (ACVL) survey reveals that member leasing companies reported a total reduction in new leases from 2 million in 2002 to 1.6 million in 2003. This 19.8 percent volume decline demonstrates the continued effect of high cash rebates and interest rate subsidies, combined with longer loan terms. These manufacturer programs have created attractively low monthly loan payments and induced some consumers to finance rather than lease new vehicles. Since a peak in 1999, leasing volume has fallen more than 50 percent, from 3.4 million new leases to 1.6 million new leases in 2003. The 2003 decline hit ACVL captives a harder than banks: captive total leases were down 20.5 percent, while bank leases were down 16.3 percent. The decline was more dramatic for large lessors than smaller ones. Large lessor lease volume dropped 21.5 percent compared to 6 percent for medium lessors. For both bank and captive lessors, larger members’ volume declined more than smaller ones such that the average (unweighted) volume decline was 14.9 percent for captives and 6.4 percent for banks. "A number of factors are contributing to lower lease volumes," explained Rob Mize, ACVL president, "including the expansion of the zero-percent retail installment programs and other manufacturer installment sale promotions, continued declines in residual values, and fewer manufacturer subvented lease programs. However, those trends appear to be abating in 2004, so lease volume may climb this year." ACVL members also reported that end-of-term residual losses decreased from $2,909 in 2003. from a weighted average of $3,269 in 2002, an 11 percent decrease. The ACVL survey highlights a number of areas in which bank and captive vehicle leasing programs differ. For example, the average lease term of bank lessors was 51.4 months in 2003, compared to 38.6 months for captive lessors. This is the largest difference in the 11 years for which lease data has been compiled by the association. Additionally, on an unweighted basis, more than 20 percent of new bank leases were longer than 60 months. ACVL has conducted its annual member lease survey since 1993. ACVL members account for an estimated 80 percent of all consumer vehicle leasing in the U.S.