What You Must Know About The Lease Advertisement

The small print is the most important part of the advertisement. It is virtually impossible to get the low monthly payments advertised. Leasing is appealing because of lower monthly payments and a very small initial cash outlay. 

 If you read the small print carefully, you can immediately see that you cannot have both the advertised lower monthly payment and small initial cash outlay. Ask the lessor to give their definition of all lease terms. You will be surprised at the number of variations. If you do not feel comfortable with the answers find another lessor. 

Your SEO works. Now what?

You have paid a service or used staff to finally get your SEO cooking. Your ads, offers and/or business listing is moving up in local search requests. Phone calls and in-store traffic is increasing monthly. Now what?

I do quite a bit of research and subscribe to domestic and international newsletters on buyers shopping habits, internet and mobile usage and a host of other advertising and marketing topics.

But, today there were two stats that really caught my attention. The first, there are 7 billion people on earth and there are 6 billion mobile users. The second, 75% of consumers access smartphones in-store: Forrester Research.

If you are a business owner with a retail location showrooming is getting worse and costing you sales you don't even know you missed. Now that's scary. What you don't know won't hurt you but, in this scenario what you don't know will kill your business. By the way if you don't know what showrooming is stop now and find out before you go out of business.

As a marketer how do you best use these stats to help your clients? If you have no mobile or digital solution for your clients you better get several before they leave you, asap.

Businesses offering free wifi to keep shoppers in-store longer and/or as a customer service feature your competition thanks you. If you have no real value for those shoppers while inside your store that "just looking" means found it down the street and thank you for your help.

Your SEO works. Now what?

TO (Turn Over) - Why Does It Work?

Auto dealers continue to use this tried and tested sales technique, the turn over. Here's how it works. Once the salesperson has helped you decide on a car you begin to negotiate the purchase price.
 
The salesperson will spec out (list the equipment) the car on a work sheet. Also included on the worksheet is the MSRP (manufactures suggested retail price) and the list price (price that includes any added items). Next the salesperson spins the worksheet around, explains the list of items and highlights the selling price for the vehicle and asks for your okay or acceptance, a signature.

There is a moment of silence. The salesperson waits eagerly for your reply to the sales offer. After you regain your composure from the shock of the total selling price you make your counter offer. At this point the salesperson explains that he/she cannot make the decision to accept your offer. It must be taken to management  and if you'll just okay the price he/she  will take it to management for acceptance. Dealer management does not  let the salesperson know how much profit is acceptable per sale on any vehicle. Some salespersons may go to these extremes to test your seriousness prior to going to management. They are, get your credit card for a small deposit, get a check or get a cash deposit.

Once you meet the minimum test for how serious a buyer you are the salesperson will then take your offer to management for approval. Rarely is your first offer accepted. The salesperson may go back and forth with your counter offers until you are stretched to the limit and ready to walk out.

Before the dealer will let you walk the sales manager will come over to use his/her salesmanship to close the sale, the TO - turn over to management. This sales technique works because the sales manager is an expert at closing and buyers are more responsive to authority. The sales manager can further reduce the price if needed, persuade you to buy a more affordable vehicle or offer you a special price on a "Managers Special."

If the sales manager can't get you to buy you may be turned over to the general manager before you leave the dealership. He can offer even more price reductions. Auto dealers have you talk to managers because the odds of you returning to buy are not in their favor.

Questions to ask the salesperson: Will you have to go back and forth to management for approval? How can I shorten this process? You have sold this type car before, what's the lowest price that will be accepted? May I speak to the sales manager? Will I get the best price from your web site?

Caution: Inclement Weather Look Closer

It was a cold rainy Thursday and a friend asked that I accompany her on an appointment to test drive a Nissan Murano.

We arrived at the dealership and a 2012 Murano was parked right where we could not miss it with a huge sign across the front windshield displaying the model, year and discounted price. It is a 2012.

The salesperson came out, a few pleasantries exchanged and we took a walk around the car giving the exterior a good once over. My friend got in the passenger seat, because salesperson must first drive car off the lot, and I sat in the backseat. Off we went on the appointed test drive route.

At the designated safe spot for a driver change, my friend took the wheel. She and the salesman discussed features exchanged a few questions and answers and back to the dealership we went for the heavy lifting - negotiations.

Since my friend had done her homework, got pre-approved for financing and knew her firm buy figure, the process didn't take but one back and forth and one manager visit to say welcome.

After about an hour off she went to the F & I and the Murano to prep for delivery. Contracts were reviewed, service contracts presented and declined, protection package presented and declined, credit life presented and declined, etc. You get the picture. Buyers order and contact signed and another happy Murano owner walks out the door with the delivery person.

Now, the delivery person took her out to the car for features and equipment familiarization and another walk around the car.

It stopped raining and I came out to take a better look at the exterior and low and behold on the hood were several spots that at first glance looked like just a few rain spots. Wrong. Ran my finger over each one a found deep service scars. At about this time the general sales manager came out to thank her for the business and asked if all went well.

I showed him the several blemishes he rubbed them agreed to have them removed and had salesperson get a We Owe form. This form is used to schedule appointment for car to be brought back buffed and whatever else is needed to remove the imperfections.

This could have been prevented if we had not been distracted by the cold and rain. This could have happened if it were night time. Caution: in inclement weather before you sign the contract have the car cleaned, brought inside with good lighting and you conduct a thorough walk around paying extra attention to painted surfaces and wheels. If it's dark have the car taken inside for a good look.

My friend brought the car back as scheduled given a loaner and asked to come back in a few hours. A few hours later the dealer called and said the car would have to go to a paint specialist. She loss that day, the weekend and Monday of the following week.

It's Tuesday around 6:15pm and she's waiting for the dealer to bring her new Murano over as he said in an earlier call today. Caution: in inclement weather look closer before you buy.

Auto Residual Values

Residual value is what your lessor predicts the leased car will be worth at the end of lease term. Residuals are predicted by using actuary tables based on previous resale values of like vehicles. Some cars will maintain their value and others will not. The higher the cars residual value the lower the monthly lease payment. The higher the cars residual value the higher the end of the lease purchase option. Lessors will vary the residual value to compete for your lease business. This means that the car you want to lease may have different residual values established by each Lessor. The residual value directly affects your monthly lease payment and must be disclosed to you. In the majority of leases the residual value is also the end of lease purchase price. So, a high residual value will lower your monthly payment but it will cost you more to buy the car under the end of lease purchase option.

NOTE: Residual value will lower your monthly payment by reducing the amount of the car's value you use. Example:  Cars value is                     $10,000.00 (-) residual value                  4,000.00                                    $ 6,000.00* *Car's new value that monthly payment is calculated on.  Residual values is one of the most abused parts of auto leasing. Companies would inflate the future value of a vehicle to lower payments and be competitive. Inflated Residual Value is one of the main reasons auto leasing almost died.

Lease Terms You Must Understand

Lessee - YOU! The authorized driver and person indicated on lease document. 
Lessor - The company that bought and owns the leased vehicle. 
Residual Value - The projected dollar value of leased vehicle at end of lease term. Amount is set by lessor or insurance company. 
Guaranteed Purchase Price - Same as residual value. 
Purchase Option - Same as residual value. 
Purchase Option Fee - This is additional profit. 
Capitalized Cost - The total dollar amount to be financed. May include all additional fees, taxes, tags, dealer profit, service contracts,etc. 
Capitalized Cost Reduction - The down payment. 
Security Deposit - This is an extra fee. Can be used at end of lease term to offset extra wear and tear charges or excess mileage charges. Usually equal to one months lease payment. Usually returned at end of lease term. 
Acquisition Cost - The dollar amount the lessor paid for the vehicle. 
Acquisition Fee - This is additional profit. 
Early Termination Fee - This is additional profit. 
Disposition Fee - Amount to cover preparing the leased vehicle for sale after lease term. Costs to cover cleaning, tune-up and maintenance on vehicle. 
Purchase Option - The opportunity to buy your leased vehicle at lease end for the stated residual value. 
Depreciation - The decline in value of the leased vehicle due to wear, tear and age. 
Mark-Up - Additional dealer profit.

What concerns you most about leasing? Did dealer disclose and explain these terms?

What You Must Understand Before You Lease

There are two types of auto leases: The most popular and lowest risk is the Closed - End ("net" or "walk away") and the higher risk Open - End ("finance")lease.
 
The Closed End Lease
With the Closed - End lease you return the leased car to the lessor and "walk away." If you have not damaged the vehicle, have not experienced any excess wear and tear and did not exceed the mileage allowance you will have no financial obligation to the lessor. Because the lessor is taking most of the risk your monthly lease payments will be higher. This type of lease is by far the most popular.

The Open - End Lease
With the Open - End lease your monthly payments are lower but your end of lease obligation is determined by fair market value. Using the estimated residual value set by the lessor at lease signing, your vehicle may be appraised or have a fair market value that is considerably less than the residual. You will pay the difference.

The Full Maintenance Lease
Full maintenance lease is not a lease at all. It is a descriptive term that means all mechanical and normal service required during the lease term will be done at no charge. Of course you don't get this premium service free. The leasing company and/or lessor contracts out this service and you pay an additional fee included in your monthly lease payment. The service work is done only at designated locations and at the required time frames.

Have you considered leasing? What swayed you to lease? Why don't you lease?