Leasing is the fastest-growing market in auto finance. Point blank period, end of story. Leasing has grown because it can be cheaper than buying a new vehicle and provides guaranteed residual values and low monthly payments.
Truthfully, leasing has become an especially important market to customers who want to minimize cash outlay or lower their monthly payments without substantially increasing the time they finance a vehicle over retail installment contracts (RICs).
So, what does all of this mean for you?
Leasing ultimately benefits dealerships, but, however, most of them are losing out because 1) They aren’t meeting customers’ criteria for leasing 2) Most dealerships lack an online presence to keep up with the leasing demand.
This article will teach you how to fix that.
Why Your Leasing Program is Going to Boost Your Sales
“Think of the customer.”
Zig Ziglar once said those are the four most important words to boosting sales.
When it comes to leasing, it turns out it’s quite advantageous for people. Today there are many new drivers who travel many miles per year but do not want to make large down payments upfront (because they will lose that money as equity at trade-in).
Leasing also helps out your customers because it can be cheaper than other methods of financing because they don’t have to pay sales tax on the entire purchase price.
Leasing helps car dealers increase customer retention by 60%. Leased vehicles also have a much lower loss rate than sold vehicles. Leasing is the #1 tool for generating high-quality leads on potential customers and increases dealer audiences by 4X.
Furthermore, as more Millennials and Gen Zer’s enter the auto market their needs are much different than their parent’s. They don’t want to be tied down to one single car. They don’t even want to be tied down to one single house. This is the renting generation, not the owning generation.
It’s why leasing continues to grow at a breakneck pace becoming a $73.30 billion in 2021 and is predicted to keep growing.
Why You Need a Better Online Presence (and how leasing helps)
Most car dealerships lack an online presence and of those that do have one, it’s bad. Like the 2000’s early internet kind of bad.
As you know, we live in a tech-minded society and right now only 1-in-3 franchise dealers offer purchase-process steps online. And of that 1/3 it’s only minor, not full E-Commerce.
Today people want to order things from their phones/laptops and have them delivered immediately, this includes cars.
Leasing provides dealer services with increased customer retention and an ideal way to enhance your online presence.
In fact, throughout our experience of helping dealerships establish an online leasing presence we’ve seen the number of visitors to a dealer’s website increase by 4x, and, depending on the online leasing tool you use (we recommend you try Leasly) you can detect high-value shoppers who have not visited your website before and target their specific buying behavior.
All of this makes it easier for your customer to find the right car for them and for you to increase sales. It also can help you/us create targeted advertising campaigns because operational expenses are typically tied to geography via zip code which allows you automatically target customers based on location.
Leasing is the future. We haven’t even mentioned that leased vehicles generate much higher residual values and lower depreciation than vehicles sold at auction or through third-party used car outlets.
Lease opens up new revenue streams for dealerships by attracting customers who typically would not shop at traditional brick-and-mortar locations.
It will help dealerships like yourself generate leads online, increase their online presence, gain repeat business, create brand loyalty, and expand market share. It’s the perfect revenue stream to add to your business.
If you don’t have an extensive used car leasing program or a high-functioning online presence you are leaving money on the table. It’s time to stop doing that.