JAMES B. TREECE

Getting to yes on a lease

Automotive News | August 14, 2013 - 12:01 am EST

In the F&I office, it's all about getting the customer to say yes and sign.

Ideally, that's for a well-structured loan with other F&I products as well. But sometimes it means getting the customer to say yes to a lease.

A lease doesn't have the profit potential of a loan. But cash sales hold even less profit potential. If a cash customer can be persuaded to switch to a lease, that's better for the store -- especially because that customer will be coming back to the dealership in 36 months or 24 or whatever.

Here's a factoid that might help persuade a wavering lease customer: It's getting easier to get out of a lease if you have to, say, because of a sudden transfer to an overseas job.

Customer credit approvals on lease transactions through the end of July stood at roughly 76 percent, says Swapalease.com, a site that allows leaseholders to get out of their lease by finding someone else to pick it up. Historically, anything above 70 percent means that credit approvals are not a major problem in getting out of a lease if a customer needs to.

Nobody goes into a lease expecting to have to get out of it. But if that's a worry in the back of a customer's mind, here's something to tell them. And it may be the news they need to know to say yes.

James B. Treece is industry editor for Automotive News.James B. Treece is industry editor for Automotive News.

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