Leasing: Does Your Team See the Light?
Lease incentives are around the corner, just in time to take advantage of record lease penetration. Recent vehicle registration data released by Polk stated that new cars accounted for 29 percent of all sales through May, which puts the year on pace to top last year’s rate of 27.6 percent. This is the highest penetration of new cars in the last five years. According to Edmunds, leasing is behind this breakthrough accounting for 25 percent of new cars sold.
At this time, it is vital that your sales team is trained to not only close a sale, but also a lease. The most important question to ask yourself is, “Does my team know how to position leasing vs. a traditional loan?” If you don’t know the answer, then these tips will help refresh your team until you register for EFG’s lease training workshop.
Everyone knows that all vehicles depreciate in value as soon as they are driven off the lot. However, few consumers make the connection that their vehicle depreciates at the same rate whether they lease or buy. The only difference lies in what they pay for. Think about what most customers say is their single biggest expense is in owning a vehicle. They either say their monthly payment or gas. The truth is that their single biggest expense may be the hidden cost of depreciation.
Most customers don’t learn about this expense until it’s too late – at trade-in time, when dealerships offer them less than what they expected or needed. Offering them a lease is a great way to manage the depreciation expense and make the trade-in process easy.
When positioning leasing, just as with purchasing, your sales team needs to understand their customers’ needs.
If they have a predictable lifestyle, drive a low average number of miles, properly maintain their car, and want to make trade-in easy, then leasing may be a good option. Top selling points for a lease include:
- You only pay for what you use.
- You are protected from market risks that affect the value of your vehicle.
- Bad press
- Discontinued model
- You may lower your monthly payment without being stuck in a long loan.
- You get to drive a newer model car with the latest technology and safety features.
Advise your customers that when they buy, they commit to the entire cost of the vehicle – no matter how many miles they drive or how long they keep it.
While leasing is on the rise, there will always be people who prefer to buy. That’s why it’s important to ask the right qualifying questions before positioning a lease, such as:
- How often would you like to trade in your vehicles?
- When was the last time you paid off a vehicle and kept it for a while?
- How many miles do you drive per year?
- Do you trade your vehicles or sell them outright?
- When was the last time you were happy with the amount offered for your vehicle at trade-in?
In the end, your sales team needs to help their customers decide what matters to them. The decision to lease or buy depends entirely on their lifestyle and what they feel comfortable with.
With more than 35 years of insight into the consumer mindset in the auto retail space, EFG’s Transcend Group knows how to train your team to readily position the benefits of leasing compared to 3, 4 and 5 year retail loans. They also gain a deeper understanding of how closing a lease benefits them and the dealership.
To take your team members beyond the fundamentals of leasing, register for our Lease Training Workshop today before it’s too late!