How Leasing Aligns With Gen Z’s Money Mindset

As 2026 approaches, credit unions face a pivotal moment in auto lending. Auto leasing is no longer a niche offering. It’s quickly becoming a standard expectation among members, especially among younger generations. Credit unions that ignore leasing risk missing out on both revenue growth, and stronger member engagement and loyalty.

The Rising Demand for Leasing

In some markets, up to 55% of new vehicles are now leased (Experian). This shift isn’t a passing fad. Consumers increasingly see leasing as a smarter financial choice: lower monthly payments, shorter commitments, and the ability to upgrade vehicles more often. These advantages resonate most with younger members who value flexibility and financial control.

Economic Pressures Are Reshaping Member Needs

Gen Z is entering the auto market under extraordinary financial pressure. Velera’s CU Growth Outlook 2025 report (via Credit Union Times) reveals that 72% feel uniquely burdened by today’s economy. Yet at the same time, 61% of Gen Z still feel confident in their own ability to manage money, even as 54% doubt the economy as a whole (CU Broadcast, 2025). This paradox matters: Gen Z may not trust the economy, but they trust themselves.

Their top financial goals reflect this thinking:

Financial independence (37%)

Paying bills consistently (33%)

Avoiding paycheck-to-paycheck living (33%)

Unlike older generations who tended to follow a set path — finish school, start a career, buy a home, then save for retirement — Gen Z is putting financial stability first. They’re cautious about big expenses, and that prevention-focused mindset shapes how they think about owning a car, taking on debt, and managing monthly payments. With record-high car prices and loan terms stretching 72–84 months, traditional financing can easily lead to long-term debt and negative equity. Leasing, on the other hand, gives members a more manageable way to drive a car while staying on top of bills, maintaining budget predictability, and preserving financial flexibility.

Why Leasing Aligns with Gen Z’s Money Mindset

Leasing aligns closely with the financial priorities of younger consumers:

Lower monthly payments make vehicles more affordable and reduce financial strain.
Shorter commitments prevent members from being locked into long-term debt.
Frequent upgrades give members the flexibility to switch into newer cars sooner.

Gen Z has grown up in a subscription-based world, from Netflix to Spotify to clothing rentals. Leasing mirrors that model: access what you need now, enjoy the benefits, and move on when ready. For a generation focused on independence and prevention, leasing offers mobility without the full financial burden of ownership.

“Leasing mirrors the subscription-based world Gen Z grew up in: access what you need now, enjoy the benefits, and move on when ready.”

The Credit Union Opportunity — and the Risk of Doing Nothing

According to Velera, Gen Z already views credit unions as trustworthy and member-focused. But there’s a catch: they also see them as less convenient and less digital than national or virtual banks. If credit unions don’t modernize their auto programs, younger members will turn to dealers, captives, and banks that already position leasing front and center.

This is a critical moment. Capturing Gen Z requires creating digital-first, flexible, and affordable auto solutions before competitors do. By doing so, your credit union can:

Strengthen retention by delivering solutions that align with member expectations.
Attract new members with competitive and flexible auto options.
Stay competitive against national banks and fintechs that are already meeting Gen Z where they are.

The Challenge: Operational Complexity

Credit unions live and breathe their loan portfolios. But lately, the warning signs are getting harder to ignore. Delinquencies are creeping up, and that’s not just a member problem, it’s a portfolio problem.

Here’s the breakdown. Thirty-day delinquencies on auto loans climbed from 3.00% in Q4 2023 to 3.12% in Q4 2024. Sixty-day delinquencies also inched higher, now sitting at 1.16%. The jumps might look small on paper, but the trend is clear: more members are falling behind, and it’s happening faster than most expected. We’re heading back toward pre-pandemic territory, and not in a good way.

It’s hitting some members harder than others. Used car buyers and borrowers working with independent dealers are feeling the squeeze most. When members start slipping, credit unions feel it too.

That’s where leasing steps in not just as a smart option, but as a protective one. It gives members a clearer, more affordable path forward and helps credit unions sidestep the mounting risk of long-term loan defaults.

Bottom line? As payments rise and incentives disappear, waiting for things to “go back to normal” isn’t a strategy. Leasing helps you stay ahead of the problem, and keeps your members out of it.

The Solution: CU Xpress Lease

That’s where CU Xpress Lease comes in. Built specifically for credit unions, CU Xpress Lease delivers a full-service model that removes the operational burden so your team can focus on strategic growth and member relationships.

What Sets CU Xpress Lease Apart:

100% Residual Value Guarantee: The only credit union lease program that guarantees the full residual value at lease maturity. No surprises.
Lease-End Management: We handle the entire lease-end process, from member communications and inspections to returns and collections. You’re never left in the middle.
Dealer Marketing & Support: From dealer sign-ups to ongoing training, we keep your credit union top of mind at the dealership.
No Heavy Lifting: Your only responsibility is managing credit risk. We take care of the rest.

Since our founding 20 years ago, CU Xpress Lease has supported credit unions through every market cycle, from the 2008 financial crisis to the COVID pandemic. We’ve reimbursed partners on every single lease, totaling over $3.7 billion.

For credit unions, CU Xpress Lease is more than a program. It is a proven strategic partner that makes leasing easier, smarter, and sustainable for the long term, allowing you to stay focused on what matters most: serving your members.