Everything You Need to Know About Leases in Automotive Sales Careers
When selling a vehicle, there are several options for how your buyer can pay for it. Typically, most sales are made through cash or financing. Cash sales are when a vehicle is purchased outright. Buyers benefit from not having to pay interest, and some dealerships may even offer cash incentives.
Financing, the most common option, involves a loan, usually with interest, that is to be repaid over a certain length of time. The last option is leasing, which is very different from paying cash or financing because the buyer doesn’t technically own the car.
While some car buyers are wary of leasing, for the right buyer, leasing can be just what they need to leave the dealership satisfied. If you’re considering enrolling in car sales training, read on to learn more about leasing.
Pros with Automotive Sales Careers Know Customers Only Pay for Depreciation & Money Factor
So, how does leasing work exactly? The main difference between leasing and buying is that with leasing the buyer is only responsible for paying for how much the vehicle depreciates in value during the time they are leasing it, plus interest or what’s otherwise known as the money factor. For example, a buyer may want to lease a new car worth $45,000, which the dealership expects to decrease in value by $15,000 over the term of the lease. The buyer would therefore only have to pay the $15,000 over the entire length of having the vehicle, plus the money factor.
Because the buyer is only paying for depreciation and the money factor, their monthly payments will be much lower than if they were financing the entire cost of the vehicle. This can be ideal for buyers who are strapped for cash and looking for a low monthly payment.
Leasing Allows Customers to Drive Up-to-Date Models
Most lease terms last 36 months, which means buyers who choose to lease can upgrade their vehicle model every three years—or less if they opt for a shorter term. If you encounter a customer after auto sales college who likes to have the most up-to-date technology, leasing could be the perfect solution for their needs. Most dealerships even allow car owners to upgrade their vehicle model before the lease is complete.
Many salespeople don’t realize the lucrative potential of selling leases. Buyers who lease have to return to the dealership every time their lease is up, so there’s plenty of opportunity to create a long-lasting and profitable relationship with a client. And because salespeople make commission, selling leases has the potential to really pay off.
Pros with Automotive Sales Careers Know Customers May Only Drive up to Their Kilometre Allowance
It’s important for professionals with automotive sales careers to note that leases come with a kilometre allowance, which is a certain amount of kilometres the buyer is allowed to drive the car each year. This ensures that the amount the dealership factored in for depreciation is correct, since depreciation can be affected by a vehicle’s mileage.
If you have a buyer who doesn’t know if they want to lease or buy, make sure you ask them about their driving habits. If they tend to drive varying long distances, leasing may not be the best option for them, as going over the allotted mileage can be quite costly due to extra fees. However, if the buyer is a regular commuter and their typical yearly driving distance is within that of the kilometre allowance, leasing can be a great option.
Did you know taking car sales training in Toronto can prepare you for a lifelong, lucrative career selling cars?
Contact Automotive Training Centres today to learn more!
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