Welcome to this week’s episode of Used Cars Weekly, the original CBT News show dedicated to bringing car dealers best practices and tips for the used car department, in-depth dealer interviews, hands-on dealership strategies, as well as vendor analysis. Today, host Jasen Rice, founder of Lotpop, is joined by Rudy ‘El Patronn’ Treminio, Dealer Partner at Volkswagen of Brooklyn.
Lately, franchise car dealers have been putting an increased emphasis on the used car department in order to combat new vehicle inventory challenges. Used car acquisitions and sales have been at the forefront of the conversation, however, today Rice and Treminio discuss, the often overlooked, used car leasing process.
Treminio says that the dealerships have had a lot of success with used car leases. In fact, around 80% of consumers in his market lease. He explains that the transition into offering used car leases wasn’t difficult because the cycle of the customer lends itself to this model nicely. This is especially true when it comes to Treminio’s new venture; leasing high-line exotic cars. Since the lease residuals on these vehicles are self-funded, Treminio has a lot more flexibility when it comes to terms and payments.
Treminio explains, “The profit is so much, and you still get the customer out of [the lease] in two or three years…Like I said, it’s a win-win, and the customer is getting their dream car.”
Treminio says goes on to say that they are set to make 50 deals this month alone and that 25% of sales overall come from these leases. Furthermore, many of these sales couldn’t be done with traditional transactions due to mitigating circumstances, like affordability and credit.
While leasing is not new to the used car department, taking different approaches to it will be crucial considering the uncertain nature of the industry’s future.
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