Rotterman presented the tips in an Automotive News webinar called "Mission Possible: Embrace Leasing and Boost F&I Revenue." Here are some tips from her presentation:
1. Negotiate: Don't box yourself into the lowest possible lease payment.
"Don't go out with that low 39-month, 10,000-mile-a-year lease right off the bat. Let's lead with the 24-month and maybe a 15,000-mile-a-year lease. That's what's going to help that customer determine what fits their needs -- their driving needs, their trade-in cycle. We can't always deliver that low payment because once we do, once we share that lowest payment with the customer, there's nowhere to go."
2. Advertise: Tell customers there are alternatives to low-mileage leases.
"We need to make them aware they're not all low-mile options. You know, if I look in the paper today I see 8,000 miles, 10,000 miles, 12,000 miles. Well, if I drive 15,000 or more, I think I can't lease. We need to get the message out there that, hey, there are high-mileage options as well. We don't need to advertise that payment because obviously that would put us in an uncompetitive light."
3. Use an F&I menu: Create a menu for lease customers; make sure salespeople are on board.
"If your salespeople are endorsing your products, they need to endorse the products that fit the lease customer. The 300 Rule, we know, is all products to all customers all the time. It's a good rule. It still stands for leasing. But the product range is different for the lease customer. It needs to be geared for the short-term customer -- maintenance, key replacement, things that can affect the actual lease end process as well."
4. Adjust F&I expectations: F&I income will probably be less than a loan, but it can still be substantial. And a lease can close the deal, keep the customer, and get the customer back sooner for another car.
"F&I managers, I know; I get it. We all think that it affects the bottom-line profitability of the F&I department and, look, I'm never going to tell you you're going to make as much on a lease as a retail because that's probably just not true. But we have to think beyond today. And we have to think what that shorter term really does. And we have to talk about incremental business."
Replays of the webinar are available for free at www.autonews.com/powertraining.