The benefits of year-round purchasing
Sales pick up in December; but you can help your customers year round.
By Lucas Deal, Associate Editor
It is not uncommon for businesses to increase their leasing and equipment finance rates in December, says William Sutton, president and CEO of the Equipment Leasing and Finance Association in an article released on Nov. 29.
Taking advantage of expiring tax rates and “use it or lose it” budgets are the most common reasons for this end of the year push, Sutton says, but that doesn’t mean customers will only add inventory in December. If a customer wants to lease a product in December that is great, but he says if you can remind them about the value of leasing in January, too, that’s a definite bonus.
“There are lots of good reasons for businesses to lease and finance equipment in December,” he says, “but none of those year-end factors supersede the fact that equipment financing and leasing is a sound budgetary decision throughout the year.”
Sutton claims there are at least 10 benefits for customers to lease equipment year round. To operate a successful dealership, your sales staff should understand these reasons and know how to communicate them to your customer base.
A dealer cannot operate without a steady stream of customers. Any information you can provide to them to jump start them toward making consistent transactions is a good idea for your operation and your bottom line.
Besides, just because customers are more likely to lease or finance equipment in December, that doesn’t mean they only want to add equipment in December, Sutton says.
If a customer only needs a component for a short period of time, it doesn’t make sense for him to buy the product or wait until December to lease it, he says. Providing the component for the time the customer needs it — whenever that is — is the smart business decision.
Reasons for year-round purchasing
The first reason for customers to lease products throughout the year is the flexible financial solutions they can receive. Because of the financing solutions your business can offer its customers, Sutton says you can tailor leases and rental to a customer’s precise needs.
The next reason customers may want finance equipment year round is capital preservation, Sutton says. The different types of financing your business can offer allows a customer to minimize its capital investment in a product, which helps offset a potentially undesirable yield on a return.
A third benefit of year-round leasing for customers is how it improves expense planning. According to Sutton, large fluctuations to a customer’s budget can be avoided with consistent leasing and financing plans. As a dealer, that is an excellent selling point for your customers.