Lease Here Pay Here – Inventory Sourcing
Kevin Londerholm | February 12, 2020
When an independent auto dealer begins researching the benefits of creating a Lease-Here Pay-Here Program, one of the most intriguing benefits is the increased profitability from creating greater Return on Asset (ROA). When a lease-here pay-here deal matures, the dealer can still retain the asset at the end of the customers lease contract. This provides the dealer with the option to either re-lease the same vehicle again or sell the vehicle at auction. Re-leasing the vehicle creates additional profitability as a second stream of payments is generated on the same asset with a new customer.
Therefore, successful LHPH Dealers approach the sourcing of their vehicle inventory with the intent to lease a vehicle to two or even three customers during the useful life of the asset. This mindset of creating the greatest Return on Asset begins with the vehicle purchase for the dealer. Check out how Nick Markosian (featured at the LHPH Summit 2019) approaches the sourcing of his LHPH inventory below: