Maximizing Lease Buyouts

So now, as demand for new cars continues to rise and the production levels remain stagnant, how do dealerships plan on turning a profit? Lease buyouts provide a great opportunity for dealerships to continue selling cars despite low inventory.

Low Inventory

Car manufacturing plants across the globe have shut down or are observing strict regulations in response to the COVID-19 pandemic, leaving dealerships with historically low inventories. In a normal year, 25% of a dealership’s inventory consists of vehicles from the new model year. However, in 2020, dealerships reported that only 3% of their inventory consisted of vehicles from model-year 2021. Despite the struggle to obtain new vehicles, by the end of the fourth quarter, many dealerships were pleased to report that, overall, their year-over-year numbers increased. But why? As the pandemic continued to persist, more and more people began looking for ways to travel outside of public transportation. This need, combined with the fact that auto-loan interest rates were historically low, many customers felt more comfortable investing their money in a new car.

Lease Buyouts

As inventory remains a struggle for many, encouraging customers to buy out their lease can provide a win-win. Maximizing lease buyouts has benefits for both the dealership and the customer.

Dealership Benefits

  • The sale does not subtract from limited inventory
  • No need to remarket the vehicle

Customer Benefits

  • They know they like the vehicle
  • They know the vehicle’s history
  • The total price of the vehicle is already partially paid for

Just like when a customer comes in to purchase a vehicle, those who wish to buy out their lease will need guidance when it comes to financing and insurance. Empire Dealer Services can help your dealership train the employees not only within the F&I department but across the sales department as well to ensure a cohesive effort in maximizing profits.

If your dealership has been struggling to see a profitable outcome due to COVID-19, contact our team today. We can help your dealership succeed through F&I development, team training, recruitment, dealership compliance, as well as new and used car services. Reach out today to get started!

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Dealership Performance

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