Simple Steps to Make Every Lease a Home Run for F&I
Leasing a new car is a great option for many new car shoppers…lower monthly payments, being able to jump into a new car every few years, not dragging out a loan term to 72 or 84 months just to make the payment workable. Who doesn’t love the idea of a new car for a much smaller payment?
For an F&I manager, well…not so much. For some, it’s almost as bad as a ‘cash deal’ when it comes across your desk. Lease terms are generally 24-36 months on average and that makes it harder to sell a VSC since the factory warranty will cover them until turn-in. There is no traditional finance reserve you can bump up for extra PVR and other menu items are tougher to sell since most don’t want to add a dollar to that prime advertised payment that got them to come into the dealership in the first place.
How do you build out a killer complimentary lease package that your customers will be happy to consider and buy? Can you turn the ‘No, I won’t need that’ into “Wow, I better have that just in case’ ?
Easy. Here are some simple strategies you can use to turn those leases into PVR gold:
- First question is the most important…ask if this is their first lease. If they have leased before, you know what to pivot to when it comes to turn-in fees. If they have had to pay them in the past, it’s easy to present the ancillaries that will mitigate that loss this time around. If this is their first lease, go to…
- Reinforce their choice…tell the customer that you, too, see leasing as a hassle-free way to drive a new car every few years with a smaller payment. Always make the customer feel good about their decision rather than starting right in on all the things they have to be cautious about. This goes a long way to helping with a more open attitude to adding critical protections.
- Comb the fine print…go through the lease obligations in detail and make sure they are aware of the exact costs that they are responsible for at turn-in (assuming this is their first lease). Here is where you start to tie in the specific protections to counter each obligation like Tire & Wheel, windshield, or PDR. Even key replacement is often a customer obligation if they lose it or it’s damaged.
- Ask one more time…if you sense hesitation, ask if they understand the terms. Some customers check out a bit and just want the F&I part of the transaction to be over but if you gently force them to recognize that they do fully understand wear & tear, excess mileage, and other charges, you have one more chance to pivot back to product. If they have leased before, ask how much they paid at their last turn in…that will tell you a lot. If they had to shell out a decent amount, your selling process should be easier as they won’t want to incur those expenses again.
- Show payment with product…no, this is not the ‘payment packing’ nonsense from back in the day. Letting your customer see what adding PDR and key replacement will do to the payment immediately helps them understand how little it may impact the payment versus what they may assume.
Easy enough to say “Many of our lease customers looked for very specific protections to reduce the potential for high turn-in fees - I have included two of them here so you can see that it doesn’t add much to your payment.’ Then show the payment without but they get to see for themselves very quickly that key and PDR will likely be much less than $1500 in recon fees at the end.
With the average lease payment in 2021 coming in at $460, your job is to show that you understand that every dollar matters but that it’s equally important to help them not have to get hit with a substantial bill at the end when they may not be able to afford it.
- Private label a lease package…this can help attract more local shoppers to your lot with a strong ‘Why Buy Here’ value proposition. If every lease from your store comes with a Protection Package included for a flat price, it gives shoppers the upfront transparency they look for now. They can see what the protection is, how it’s designed to help them, and know that everyone pays the same for it no matter what model is leased.
Branding it to your store keeps them coming back to your service lane for repairs or replacement, all in service of making their lease experience as easy as possible. Your local dealership makes it easy and no price game…one price for every lease. Or something like that…but it will resonate with buyers in your market by giving them something no one else is.
Lease customers are going to default to ‘I don’t need that’ by virtue of the type of transaction it is but that doesn’t mean all is lost. Strong profits can be made if you approach every customer with the facts and protections that are there to counter every obligation should it arise. It’s about enhancing the lease experience for your customer while preserving the ability to increase penetration in F&I with the least amount of pushback.
If your dealership has never considered a robust lease package, it’s time to take a look at ExoBundle powered by TruWarranty. We have a complete ancillary menu of protections that are a perfect fit for every lease customer including full interior/exterior appearance protection, bundles that include PDR, windshield, key replacement, alloy wheel, and 24/7 roadside.
Bundle them or offer them as separate menu items…either way we can help you build out a complementary lease program that gives every deal the profit potential it needs and helps F&I look forward to lease deals again.
Most people would agree that the dealership environment works best when all the managers across departments work together for the common good of the store. Each department is in some way interdependent on the other for support for the common goals of profitability. Service can support sales efforts in F&I, Parts and Service fit together like a glove on a daily basis, and F&I managers often lean on Sales Managers to help bring in buyers that are qualified before they come into the office.
What if we told you there was an easier way to consolidate your financing partners and your F&I providers all in one free menu?