Three Ways to Make More Money on Lease Deals
Are you having trouble making money on lease deals? Perhaps it’s time to change your approach!
Leasing is back, but we tend to have the same mind set as cash deals (a topic for another day), bill them and let’s move on. After all, they’re a short term cycle, always under warranty; factory pays for their maintenance, right? I don’t think so. Success starts with a plan so let’s create one for your leases.
First things first—be realistic.
The goal is to increase your overall PVR, however, selling a service contract and making $1000 is generally not going to happen on a lease. You need to rely on more products and plan for less gross per item. It could be $100 on maintenance, $250 for tire and wheel and/or $100 for key replacement. The highest grossing business managers’ average $500-$750 per lease, the key is making something is better than taking the goose egg. Your lease PVR will affect your overall number dramatically.
Plan your work, work your plan.
People lease for many reasons including, getting a new car sooner without having to worry about what the vehicle will be worth, tax, or business advantages, and lower payments with more car. That does not mean these customers are without exposure for expense during or at the end of their lease. So where do the lease customers’ exposures lie? Paint damage, dents, dings, interior burns, tears, maintenance (even on a lease?), windshield repairs and curb damage on wheels.
Starting with a good interview and open-ended questions is the same on a lease as it is on a purchase. If you’re not sure what’s important to a customer how can you recommend any products? People are still going to maintain their vehicle during a lease, they are going to have to change the oil, rotate the tires, and change wiper blades. They want the vehicle to look good while they’re driving it, and they don’t want any surprises at the end. The goal is to expose their problems and then solve their problems.
Use a menu.
A lease menu needs to employ another approach to reach lease customer’s different mind-set. A great lease menu speaks directly to lessees varying situations. Additionally, using a paper or electronic menu allows another sense (sight) to be activated during your presentation of your customer’s potential exposure. Although not intended, the menu is often used for a sales pitch. Instead, think of it as a visual tool for communicating your message and briefly explain the features and benefits of each available item then ask the customer to make a choice. This is the equivalent to starting at list price. Get creative with the structure of your menu.
To take advantage of your lease opportunities and increase your overall PVR, first, set realistic goals for improving your position and write them down. Second, a good plan today is better than a perfect plan next week. Finally, customers will not buy 100% of the products you don’t present.
Jim Devitt is the Chicago District Manager for Automotive Development Group, LLC