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The “No Need” Objection

This month’s submission comes from New Hampshire’s Salem Ford Hyundai. The F&I pro there requested advice on how to present products to lease customers, who account for 20% of the store’s sales: “I’ve noticed an increase in repeat leasing customers who are declining all products because they claim they’ve never had any issues.”

According to Experian Automotive, leasing accounted for 28.5% of all new vehicles financed in the fourth quarter 2013 — the highest level since 2006. And I don’t expect leasing to taper off this year, especially with OEMs offering heavy incentives to get lease customers to lease again.

Name: Armando Rodriguez

Company: Salem Ford Hyundai

Objection: Lease customer says he has never experienced any issues before and doesn’t need the protection.

Tony’s Take: F&I products are like insurance in that we’re glad we have the coverage when we need it, a point we need to drive home with lessees. Also keep in mind that people buy things to avoid a loss or to create a gain. Think about it. We buy a vehicle to create a gain and we buy F&I products and insurance to avoid a loss. It’s not that we expect a loss; we just want to protect ourselves financially if we do. In Armando’s case, I’d start by making sure customers are aware of what the lease company expects come lease end.

Disclose the Need: Some operations I’ve visited are presenting customers with a lease disclosure form containing the exact verbiage found on the back of a lease contract; specifically, requirements related to maintenance and vehicle condition. I’m guessing these stores created these forms because customers were returning to the dealership unaware of their responsibilities. Well, this document can serve as a nice transition into our product presentation. Here's an example of a dealership lease damage disclosure:

I/we will maintain the vehicle in good working order and condition and have all necessary repairs made using genuine _____________ replacement parts.  I will pay all expenses for vehicle use and operation, including maintenance, repairs, fluids, tires and all other expenses.  At my expense, I will have the vehicle serviced in accordance with the manufactures minimum recommendations and have documented proof that such service has been performed.

I/we will reimburse Lessor for the full retail amount it would cost Lessor to repair excessive wear and use of vehicle.  Excessive wear and use may include, but is not limited to:  mechanical failure, broken or missing parts or accessories, missing keys or remote entry device, damage to body, fenders, bumpers, lights, trim, damaged or broken glass, faded of discolored exterior surfaces, interior stains or excessively worn areas, unsafe or damaged wheels and tires or any other damage that will make the vehicle unsafe or deteriorate the value.

Before using the copy above to create your form, be sure to have it reveiwed by your dealership's legal counsel. Now, I want to highlight a few terms in the above disclosure that you need to review with your customers. As for presenting the form, treat it like the “As Is” Buyers Guide. Simply explain what the form is and what the lessee will be responsible for when he or she returns the vehicle. Having a few examples to demonstrate specific requirements is a must. Now let’s review those terms.

Genuine Factory Replacement Part: Nothing builds the need for our protection more than informing the customer that aftermarket products cannot be used to repair a leased vehicle. And it’s unlikely your customers have priced out a heated windshield connected to wiper sensors, a lane departure system or active cruise control. Several windshield repair companies have also told me they won’t repair windshields linked to safety features.

And when reminding lessees that they will be responsible for lost keys, make sure to inform them of the cost to replace a key equipped with a proximity sensor.

Body Damage: Most people don’t realize “damage” means anything that could reduce the value of a vehicle, including the smallest of dings. They may also not be aware that body damage can be considered paint deterioration.

Deteriorate the Value: Be sure to explain what this phrase means, and be sure to tell them who will make that determination and when. We know it’ll be a third-party inspection company hired by the leasing company, and we know these inspectors will make their determination when the only corrective action is for the customer to write a check for the damage. Now you can explain how your products can prevent such situations.

The Close: Once you’ve presented the form and highlighted those terms and phrases, ask if the customer has any questions before they sign the form. Then try this light trial close: “Wouldn’t it be great if you didn’t have to worry about any of this and all you had to do was gas and go?”
By educating lease customers about their responsibilities at lease end, we can head off most objections. Once we make them aware of what’s expected, we can use that trial close to justify the need for our products. Good luck and keep the emails coming.

Tony Dupaquier serves as director of F&I training for the Automotive Training Academy, a division of American Financial and Automotive Services Inc. If you’d like his help on a troublesome objection, email him at StumpthePro@fi-magazine.com.

Nothing in this article should be taken as legal advice. All tips and advice shared in this article should be reviewed by competent legal counsel.


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