It's common knowledge that I've been struggling with hitting my numbers for the last 8 weeks. I should have expected a run like this since I had a run of 14 months that were above average. Instead of saying "Why Me", I'd rather stick to "Why Not Me".
I had five appointments in the field today and that gave me a lot of windshield time and time to think. Because of the pandemic and now the ensuing Delta variant I have at least 5-6 leases that are in renewal. At this time I've not found a way to get those clients to upgrade. In most cases it's easy to show the show the savings on the maintenance side in order to facilitate the upgrade. I have three clients that can save thousands yet they still won't pull the trigger and are in rollover with month to month to month clause.
With most copiers leases there are four options at the end of the lease.
- don't return and don't buy, just keep renting on a month to month, or every two months and some leases will auto renew for 12 months
I would tend to think that most copier dealers that use leasing companies have these options in the lease. The fourth clause can be different from each dealer and or leasing company.
I'm also aware that there are many dealers that have their own leasing companies and they may dictate the end of lease terms differently from what I've seen and what I use in the field.
I just looked up the terms of my car lease and at the end I have three options. One is to purchase the leased vehicle, upgrade to a new lease or return the car and walk away. There is no rollover clause that I know of, however I have heard that some of the car manufacturers will grant a short term extension of the lease if needed. Pretty simple stuff right?
Times Like These
We've never endured times like these before in our industry. I've got five to six leases in rollovers and I can only imagine how many others are in the same boat as me. It's times like these that make you think about those terms and conditions and if they could be changed to help facilitate upgrades in a more timely manner.
At some point in time these clients will pull the trigger on the upgrade but when you're struggling you tend to think that just maybe there is another option to add or takeway. Most leases state if you don't exercise your option the lease will renew on a month to month, every two months and then some that have a 12 month rollover. I've heard that some of the leasing companies will roll a portion of that rental back to the dealer. So, that's great for the dealer but not so great for the sales person because they don't see any of that revenue. Thus good for the leasing company and somewhat good for the dealer.
What I Would Like to See
I'm not sure if I'll be around when the next pandemic hits, but it would make sense to me that a dealer may want to re-think the the fourth option of the roll over. Now this idea comes from chats with many clients that have asked me about the end of lease options. When I get to option 4 which is the roll over some of the clients asked me if there is an additional cost for the device once the lease goes into the month to month. The reaction from the client is more like they thought there would be an increase at the end of the term. Of course there isn't but what if there was? Why can't the month to month rental double in cost or there is no month to month option and the equipment has to be purchased, upgraded or sent back.
If we had these additional covenants it would be a win for the leasing company (especially if the lease went to rollover at double the cost), win for the dealer and the sales person would have a much better chase of securing the upgrade at the end of the lease.
Again the only reason that this came to mind is my current situation but it does get you thinking and when you compare the end of lease options with a car it seems to be that they are better at protecting the upgrade process.
As my buddy @VinceMcHugh, just my two cents