As off-lease vehicles return to the market and expand used-vehicle inventory, some dealers and lenders are leasing those vehicles. But not all vehicles are suited for a used lease, according to a white paper from Black Book.
Dealers and lenders should analyze collateral data to determine the best option for the customer, dealership and lender, Anil Goyal, senior vice president of automotive valuation and analytics for Black Book told Automotive News.
“It’s well-known that the [off-lease] supply is coming back more than even what we have seen in the last five years, and the industry is preparing for it,” Goyal said. So dealers and lenders are exploring options for lease returns, including used-vehicle leases.
Black Book published its white paper, “How to Grow a Profitable Used Leasing Portfolio,” to highlight the issues around used leasing and the opportunities used leasing provides, Goyal said.
In dealerships, he said, F&I managers should work with lenders to let those lenders know when the store expects leases to come back and to learn which lenders are interested in a used-leasing program. The lenders can then help dealership personnel understand how the monthly payments for new and used leases differ.
“It’s another value-add for a dealer to have data around the new-lease scenario and used-lease scenario and provide options for F&I managers to offer to customers,” Goyal said.