CARRUSLiNK

    Quick answer · Leasing operations

    What is a good renewal rate for lease contracts — benchmark?

    Last updated:

    TL;DR

    A good renewal rate for lease contracts is 40-55% for private leasing and 55-70% for commercial leasing. The market average is 25-35%. The difference between 30% and 55% typically depends on whether a structured T-90 re-leasing flow is used or not. CARRUSLiNK customers report a 15-20 percentage point lift in renewal rates within 6-12 months.

    The renewal rate is the most important single metric in leasing because it drives both revenue and residual value risk. If the customer renews, the vehicle is returned in a controlled manner, prepared, and the next agreement is made without loss. If the customer does not renew, the portfolio must be replaced with cold acquisition (CAC: DKK 8,000-15,000 per contract).

    Companies with the highest renewal rates share three common characteristics: (1) an automated re-leasing flow that starts at T-90, not T-30; (2) a single system that links the contract, customer, and next-vehicle offer — not a separate call centre; (3) clear margin and commission distribution between the leasing company and the dealer, so no one loses money by selling renewals.

    Key facts

    • Market average private leasing: 25-35%
    • Market average commercial leasing: 35-50%
    • Top-tier private: 40-55%
    • Top-tier commercial: 55-70%
    • Biggest leverage points: T-90 flow + one system + clear margin
    • CARRUSLiNK customers: typically +15-20 percentage points in 6-12 months

    See where your renewal rate can land with a T-90 flow on your portfolio.