Leasing can be a lucrative avenue in the F&I office, but it comes with its own set of challenges. From handling objections to structuring deals effectively, there are many factors that can influence your success. This in-depth guide will provide insights on overcoming common objections, structuring lease deals, and ultimately making money on lease transactions.

The Power of Understanding and Asking Questions

One of the most effective ways to handle objections in F&I is by asking questions. When a customer raises concerns, it's essential to engage them in a conversation rather than trying to overwhelm them with benefits. For instance, if a customer thinks lease payments are too high, ask them to break down their current monthly payment into a daily cost. This approach helps them see that the additional cost is minimal compared to the potential benefits.

Addressing Common Objections

“I Don’t Need It”

When a customer says they don’t need a particular product, it’s crucial to illustrate its value. Many customers overlook the peace of mind that comes with protection against unexpected expenses. Highlight the difference between essential and non-essential spending. They might be prepared for regular car payments and maintenance but not for unexpected costs like tire and wheel repairs or key replacements. By focusing on these potential expenses, you can help them see the value in additional coverage.

For example, you might say, “With the high price of vehicles and payments, the last thing you want is an unexpected expense like a tire repair or key replacement. These costs can be a significant burden. By opting for this coverage, you’re protecting yourself from these unexpected expenses and ensuring your budget stays on track.”

“Had It Before and Never Used It”

When a customer mentions they’ve had a product before but never used it, remind them of the peace of mind it provided. Ask why they purchased it previously. Often, they’ll say it was in case something happened. Reinforce that reasoning for the current situation. Even if they didn’t use it, it gave them peace of mind, which is just as valuable now.

Consider framing it like this: “You mentioned you had this coverage before but never used it. That’s actually a good thing. It means you didn’t have any major issues, which is great. But having that coverage gave you peace of mind, knowing that if something did happen, you were protected. Don’t you think it’s worth having that same peace of mind this time around?”

“I Can’t Afford It”

This objection is common but can be addressed effectively with a simple exercise. Ask the customer for their current monthly payment and divide it by 30 to show their daily cost. For example, if their payment is $480 a month, that’s about $16 a day. Then, break down the cost of the additional product. If a service contract adds $28 a month, that’s only 93 cents a day. Compare this small daily cost to their usual daily expenses, like coffee or lunch. This makes the added expense seem minimal and more manageable.

Guide them through the calculation: “What’s your current monthly payment that you’re comfortable with? $480? Okay, let’s divide that by 30 days. That’s $16 a day. Now, the service contract is $28 more a month. Let’s divide that by 30 days. That’s just 93 cents a day. So for less than the cost of a cup of coffee, you can have this added protection. Is 93 cents a day going to change your lifestyle significantly? Probably not, but having to pay for a major repair out of pocket certainly could.”

Structuring Lease Deals

Understanding the Market

A significant part of successfully selling leases is understanding the current market conditions. For instance, the July 1 edition of Automotive News highlighted how negative equity could amplify risks over the next 12 to 18 months. This awareness allows you to educate your customers on why leasing could be a favorable choice compared to financing or paying cash.

Setting Up the Deal

The initial setup of a deal is crucial. Sales consultants often face challenges because they don't know how to negotiate effectively. They might ask customers how much they want to spend or put down, leading to low payment expectations. Instead, train sales consultants to ask better questions that focus on the customer’s needs and driving habits.

For example, if a customer is used to a $460 monthly payment, the consultant should explore how much more they are willing to pay rather than sticking rigidly to the initial figure. Educating customers on the true costs and benefits of leasing, including the inflation of vehicle prices and higher interest rates, can also help set realistic expectations.

Leveraging the F&I Office

Once the deal reaches the F&I office, it's essential to reset and reassess the customer's needs. Ask if they are happy with the deal, the miles, and the money down. This approach can open opportunities for restructuring and add-on sales.

Selling Hard-to-Sell Products

Vehicle Service Contracts (VSC)

Selling VSCs on leases can be challenging but is possible with the right approach. Start by asking customers about their driving habits and plans for the vehicle after the lease term. If they might exceed the mileage or plan to keep the car, a VSC becomes a valuable proposition.

Maintenance Programs

Explain that maintenance is crucial and must be performed according to the manufacturer's recommendations. Highlight the risks of using cheaper, non-manufacturer services, such as incorrect oil changes leading to engine damage. Personal stories and examples can make the benefits of maintenance programs more relatable.

Excess Wear and Tear

Excess wear and tear protection is vital for covering the costs that fall between normal wear and insurance claims. Explain how these charges can add up and how this protection can save them from significant end-of-lease costs. Use tools like wear cards from manufacturers to show what is considered excessive.

Total Loss Protection

Total loss protection can be one of the easiest products to sell. It provides up to $5,000 towards a new car purchase in the event of a total loss. Explain the increasing trend of total losses due to high repair costs and the benefits of having financial support to get into a new vehicle without additional out-of-pocket expenses.

Take Your Skills to the Next Level

Handling objections and structuring lease deals effectively requires knowledge, confidence, and the right tools. For more in-depth training, consider signing up for Product Prep Live. For just $250 a month, you get access to bi-weekly live training sessions with Gerry Gould and hundreds of hours of video content. And right now, you can get the first 30 days free! Don’t miss this opportunity to refine your skills and increase your success in the F&I office. Visit Product Prep Live to learn more and take a free test drive today. Happy selling!