Everyone Tries to Get Lessee To Buy Vehicle

One way to dispense with an off-lease vehicle especially if it has low-residual issues is to try to get the lessee to buy it. That approach took root last decade but is less effective now because just about everyone is trying to mitigate losses that way as an end-of-lease strategy, says Bruce Harris, a vice president at Volkswagen of America Inc.'s captive finance firm, VW Credit Inc. The success

One way to dispense with an off-lease vehicle — especially if it has low-residual issues — is to try to get the lessee to buy it.

That approach took root last decade but is less effective now because “just about everyone is trying to mitigate losses that way as an end-of-lease strategy,” says Bruce Harris, a vice president at Volkswagen of America Inc.'s captive finance firm, VW Credit Inc.

The success of converting lessees to owners varies by vehicle. The conversion rate is lowest for premium models, Harris says.

“About 35% of leased VW Golfs and Jettas end up being acquired by lessees,” he says. “They make great cars for kids going to college.

“But as you go upmarket, the percentage of lessees who turn in cars goes up exponentially,” he says. “Lessees will not buy those cars. They drive them for three years, turn them in and look for a new car with the best deal.”

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