New Outlook on Leasing Opportunities

Agents are adjusting their F&I training programs to address the 29% of new-car buyers who opt for a lease.
By: Joshua Sonnier

New Outlook on Leasing Opportunities

In the agent’s version of a perfect world, every opportunity in the business office with a customer would unfold smoothly. F&I professionals would present products in a compliant and consistent manner, and customers would get the products they need to protect their investments. Or better yet, informed customers would request the F&I products that fit their needs and dealers would simply generate the contracts and receive their payments.

Unfortunately, this perfect world does not exist. There are no “easy” opportunities in today’s automotive industry and at the forefront of these difficulties are leasing customers in the business office.

Are leasing opportunities even important in the big picture? Are we simply not equipped to deal with leasing customers when they enter the business office? In this article, we will search for answers to these questions and find solutions to maximize leasing opportunities.

1. Do Not Ignore the Opportunities.

Let us make sure we acknowledge that leasing in the automotive industry is an opportunity that cannot be ignored.

How many opportunities are we missing out on? In 2008, leasing on new vehicles was about 15%. In contrast, according to Experian Automotive, last year closed with leasing at approximately 29%, or roughly one in three new-car sales. No agent can afford to ignore or even lessen the importance of this statistic.

Also, we need to realize that leasing is not a missed opportunity that is localized to a certain section of our industry’s customer base. Experian reports that, at the end of 2016, 24% of lease customers were subprime, while 31% were non-prime and 34% were prime-rated customers. These numbers prove that there are good opportunities with lease customers for the business office. No longer can leasing be ignored as an issue that only dealerships with luxury franchises need to focus on.

2. Know Your Customer.

Lease customers are generally sophisticated buyers. Selling based on an ability to forge a personal relationship will not work. These customers buy with their head, not with their heart. Perceived value is the driving decision for the lease customer. If you cannot prove that your F&I product offerings create value for these customers, you are going to take a zero.

3. Embrace a Needs-Based Sales Approach.

The business managers who employ a needs-based sales approach will usually see improvement with leasing customers. They can separate themselves by being professionals who listen and relate to their client’s needs. Simply work the needs-based process:

  • Define the rules of engagement with the customer.
  • Conduct a needs analysis.
  • Summarize their needs.
  • Make recommendations.

F&I managers need to listen more than they speak during this process, ask questions when they do speak (at least until they begin making recommendations), and fight the urge to sell!

4. Get Developmental.

The F&I Manager’s choice to implement needs-based selling to maximize leasing opportunities is going to live or die on his or her ability to receive and embrace development. Needs-based selling is not something that can be trained in a classroom. It must be driven and reinforced through real-world application and one-on-one development.

 

5. Add Tools to Support the Process.

A needs-based sales approach is only as good as the solutions provided. I believe this is where most of our industry shuts down on leasing opportunities. Would a traditional vehicle service contract provide value to a typical lease customer? Most would say “No.” What about a GAP product providing value to a lease customer? That would be even less likely due to GAP coverage’s inclusion in most leasing agreements.

But the product outlook does not have to be gloom and doom. Today’s product offerings continue to push the envelope to address customers’ needs. Ancillary products and even vehicle service contracts that have nontraditional coverage to address wearable items and services are becoming the go-to for leasing customers. The same customer who had no need for a traditional vehicle service contract may now recognize a need for one that offers coverage for batteries, belts, brake pads and shoes, diagnostics, fluids, hoses, light bulbs, spark plugs, suspension alignments, tires, fuses, headlamps and windshield wiper blades.

6. Bonus

A needs-based sales approach is not specific to leasing opportunities. Implementing this at any dealership will not only make it more successful with difficult lease customer opportunities, but it will make the dealership more successful overall.

Knowing the facts, implementing a plan, and being committed to the plan — even when it is not easy or ideal — will lend to higher success with lease customers in the business office. Have the mindset that not all customers are created equal. F&I Managers may need to adjust their selling techniques in certain scenarios to get the best results. Do not wait for that perfect world to happen. Create it yourself!

This article was written by:

- has written 1 posts on Agent Entrepreneur.

Joshua Sonnier is vice president of development and compliance for American Financial & Automotive Services.

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The views expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views of Agent Entrepreneur or any employee thereof.

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