In a push to boost residuals, Lincoln will pay dealers hefty bonuses if they meet targets for buying qualifying off-lease vehicles and selling them as certified-used products.
From July 1, dealers can earn payments equal to 2 percent of their new-vehicle invoice prices under one program, and a flat cash payment under a second. Lincoln’s certified used-vehicle sales severely trail those of rival luxury brands.
Certified sales account for about 16 percent of used Lincoln sales, Lincoln says, compared with 44 percent of used Audi sales and 37 percent of used Lexus sales.
By boosting certified sales, Lincoln hopes to increase prices of those used vehicles and thereby raise residual values; an off-lease Lincoln that is refurbished and sold as a certified used car isn’t going to the auction and later being sold at deep discount on a Suzuki dealer’s lot.
Kelley Blue Book forecasts the average residual value 36 months from now for a new Lincoln sold today at 43 percent of the sticker price, compared with 49 percent for Audi.
To get the first program’s bonuses, dealers must:
- Sell as certified at least 40 percent of the dealership’s used vehicles that were eligible for the certified program.
- Meet training requirements.
- Buy off-lease vehicles from Lincoln Automotive Financial Services at a rate equivalent to 30 percent of the vehicles that come back to the dealership when their lease term ends. Early lease terminations don’t count.
In the second program, a dealership that buys the equivalent of 30 percent of its terminating leases in a quarter earns $300 on each of its certified sales. The payments go up as dealers buy more.