Do we need volume, gross, SEO, SEM, video? Is our website working? Should we be leasing? Is leasing a waste of time? Do I need to sell more used inventory? Am I making enough on my new inventory? Do we have the right inventory?
Nowadays it seems that with so many questions, so much information, and tons of competition, it has become extremely difficult to decipher what is truly vital to a dealership’s success.
As former salespeople and managers from dealerships, we understand your frustrations. One thing we all agree on at Autovance is that leasing is an opportunity that makes everyone a big-time winner. Allow us to explain our thinking:
- Leasing creates an automatic sales cycle for their customer: you know the customer will return when their lease is up
- No more dreaded “buried” conversations every three to four years
- Lease returns that are bought at the right price are a high-quality, trusted used inventory source for your store
- Warranties that cover the vehicle for the entire lease term are inexpensive and easy to attach, and maintenance plans are a no-brainer with leasing: “Let’s get you setup on the plates and petro plan — all you’ll need to worry about for the next four years are plates and petro”
- Your business office also gains access to the automatic sales cycle (just like your Sales department) opening the possibility of a refinance at end of loan, and creating another opportunity to sell aftermarket products
- Customers are almost guaranteed to follow a regular maintenance schedule, and upon lease-end the vehicle will require a re-inspection
- Additional reconditioning opportunities present themselves as customers move into their next lease
Okay, so we agree that leasing is a win for the store, now the big question is: how can you start leasing more cars?
Let’s suppose a customer is walking onto your lot right now, and you begin to follow your process. Do you simply ask the customer if they want to purchase or lease? Where do you start?
Top 5 Tips to Start Leasing More Cars Today
Step #1: STOP ASKING CUSTOMERS IF THEY WANT TO FINANCE OR LEASE!
Yup, we said it, STOP ASKING! Customers don’t know how they want to buy the car until they’ve been educated on the benefits of each option. Asking how your customer wants to purchase their vehicle without knowing the benefits and drawbacks is like telling them “you’re the expert: how do you want to do this?”. They aren’t the expert: you are!
Step #2: Don’t present long finance terms out of the gate
For the love of leasing… these ridiculous finance terms are killing everyone! While the crazy long 84- and 96-month finance terms are useful closing tools, they are leasing deterrents and equity killers: avoid them until you absolutely need them. Nobody enjoys greeting a repeat customer only to discover that they’re completely upside down on their loan, and being forced to have the dreaded “buried” conversation.
Step #3: Always present BOTH the finance and the lease payment
We already told you to stop asking, but we didn’t tell you not to present both options! At Autovance, we always recommend presenting finance and lease payments every single time, regardless of whether the customer indicates a preference one way or the other. In the screenshot below, we can see just how strong a 48-month lease payment looks when placed next to a 60-month finance payment. Just put this down in front of your customer next time and watch their eyes open wide.
The “Six and Six”, Autovance’s recommended first-payment presentation worksheet.
Step #4: Talk about leasing like it’s awesome
For no good reason, too many dealership sales staff talk about leasing like it’s a plague that needs to be eliminated. We’re not sure why, but it’s like there is a stigma surrounding it. Teach your sales staff how they can win with leases: show them how to build value properly, and get them excited about leasing more vehicles!
Step #5: Get your business office on board
This step is critical: business managers are often terrified of leasing as they feel it may limit their ability to make strong profits. That said, if you can develop a strategy that generates solid back-end income on every lease, we’re confident that they will come to love leasing as much as you do. Remember, making $1,200 today and another $1,200 again in 36 months is better for everyone than making $2,400 today and then being forced to have a difficult conversation with your customer three years down the line about “burying” a bunch of negative equity