SOME AUTO LEASES END EARLY
But customers must then lease another vehicle
LOS ANGELES With the holiday giftgiving season barely on the horizon, some motorists are already lining up to make exchanges — of their leased cars.
They’re being lured by offers by some automakers to let them out of the existing leases a few months early if they lease a new car.
Such deals, which appear toward the end of the year, are good business for lessees and automakers. Motorists get a new car sooner. Automakers cash in on customer loyalty while getting needed nearly new used cars to restock dealer inventories.
Early-return deals often are conducted quietly by mail to lessees. But this year, a couple of premium brands are going high-profile with promotions that have specific goals:
uLincoln. MKZ sedan drivers now can return their cars up to six months early if they take a new 2012 model. Lincoln’s goal is to clear dealer lots of unsold 2012s ahead of the arrival of the all-new 2013 MKZ at the end of the year.
uBMW. For the third time this year, BMW is letting lessees of many of its 2010 models waive up to three payments if they lease or buy a new model before Oct. 31.
BMW’s goal in these offers, says Scot Hall, executive vice president of online car-lease exchange Swapalease.com, is to drive sales volume to pass Mercedes-Benz and Lexus. “They are very close to winning the U.S. luxury crown in vehicle sales, and they are trying to leapfrog where they are to be over Mercedes-Benz,” Hall says.
About 20% of eligible lessees have taken the latest deal since it started in September, about twice the rate of previous offers, says Shaun Bugbee, a BMW Financial Services vice president. “There is a lot more awareness of the program.”
Mercedes-Benz has conducted quiet and selective “lease pull-forward” programs, says spokeswoman Donna Boland, but isn’t taking the bait in this case.
“We are on our way to our highest year on record,” says Steve Cannon, CEO of Mercedes-Benz USA. “We are not going to do anything artificial to engineer a sales result.”
Lexus Financial Services, meanwhile, says it offers early lease returns on a case-by-case basis.
The practice isn’t limited to luxury brands. Volkswagen conducted an early lease-return program this year and last year. “It’s a (customer) retention program. It worked really well for us,” says spokesman Scott Vazin. “Toward the end of the year, you typically see these programs.” Is another one in the works for VW? “I wouldn’t be surprised to see it,” says Vazin.