Storage of competitor's equipment during lease

copymeMaven VIP

Can I get some input on this situation….
I had a prospect that was over a year out on their lease, machine was in need of replacement. They looked at 5 proposals and decided to stay with the incumbent for a new machine. The reason I lost was that they said it was easier just to stay due to the fact that another dealer would have to store the machine and then ship it back and they of course would still have to pay the lease payments until the end. I added that into the deal and was going to cut them a check for the total so they would have the funds to pay them. Question is, does this get done very often? They would have had to send a letter asking for permission to store off-site at another dealer’s address. Or if that would not work would I have had to rent an air conditioned storage unit just for this at $50 or so a month? Could they actually disapprove the storage knowing that another dealer won out and they would therefore be difficult and say no? Or do they have to allow this? Any advice would help settle an argument!

3/12/099:47 PM

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NealDocusultant Elite P4P'er

so everyone just did a stream of payments and adding it to the proposal? Why not get a buyout to return and just send it back now? Was the equipment that they had so terribly bad that they had to upgrade a year early?

3/13/097:04 AM

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dmurrahDocusultant P4P'er

most leasing companies will not take equipment back early or they will charge you an early termination fee.

3/13/098:21 AM

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Old GloryMaven VIP

Now-a-days there is no such thing as buy-out to Return...only buy-out to keep with a very high residual.
We have stored equipment but the leasing company can never know about it. Marlin Leasing for instance sends it immediately to their legal dept for litigation if they find out.
Far and away, the best answer is to fund the payments into the new deal and write the customer a check and have them make the payments and store the equipment.

3/13/0910:15 AM

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NealDocusultant Elite P4P'er

got to admit, I haven't run into this.

3/13/0911:07 AM

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txeagle24Maven

We do these all the time and occasionally have issues w/ the leasing company finding out that the equipment is off-site. How do you convince the customer to store the equipment themselves?

3/13/0912:02 PM

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Old GloryMaven VIP

Mr./Ms. customer, "Ultimately your name is the one on the lease. If the equipment gets damaged or doesn't get returned, you are the one they will be coming after. If payments don't get made, your credit rating is the one that is effected. Ask yourself this, would you loan me or any of my competitors your car? Probably not for all the same reasons you might not want to trust them or even me with your copier. I can give you every assurance that we would accept responsibility for anything that happens, but wouldn't you rather just avoid the issue altogether?"

This usually works...not always but ofentimes and it doesn't say that you won't warehouse it for them. It just recommends that it might be in his best interest.

3/13/0912:18 PM

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copymeMaven VIP

Thanks very much, I think the consensus is that the customer must store the equipment themselves either on-site. Or off-site if no room in which case they are not going to want to pay for that, so that has to be factored in to the lease, maybe $50 a month for a storage unit, then it must be taken out at lease end, prepped for shippment back, then shipped. Not sure how often folks are going to want to trust a dealer to take care of all that - has anyone done that and if so how often?

3/16/0912:19 AM

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