Considering Car Sales Training? Learn the Difference Between Leasing and Financing

If you decide to take on a career in automotive sales, you will play a very important and dynamic role within the industry. Car salesmen are the first point of contact when a client walks into a dealership to purchase a new automobile. Your responsibility in automotive sales is to accompany the client from the moment they begin their search for a new vehicle to the moment they make their final decision and drive off the lot in their new car.

When it comes to buying a new vehicle, different methods of purchasing are available to customers. However, two of the most popular are leasing and financing. Both are great ways to get into a new vehicle, but how are they different, and in what situation is one better than the other?

Read on to learn the differences between leasing and financing!

Here’s What Car Sales Training Will Teach You About Leasing a Vehicle

One of the main things that car sales training will help you understand is that with leasing the customer doesn’t actually own the vehicle. Instead, they pay the leasing company or dealership to drive a car for a determined lease-period. A lease period can be anywhere from 12-84 months. The longer the lease period, the lower the monthly payments will be.

Leasing is usually a good choice for someone who cannot afford expensive car payments. Leasing lets customers drive a car with a total value that might otherwise be out of their price range. However, there are drawbacks. For one, the customer won’t build up equity in the car, so they can’t sell it afterwards in order to make back some of those monthly payments. Also, leases come with a mileage cap that is usually between 15,000-20,000 kilometres per year. If your client has predictable driving habits, this might be a good choice for them, but exceeding the mileage cap can incur penalties of up to fifteen cents per kilometre.

When the lease period expires, the customer will return to the dealership to trade in the car and perhaps lease another. Leasing is a good option for customers as the monthly payments can be affordable, but it is also a good option for the dealership as it helps them establish longer relationships with clients.

What You Should Know About Financing a Vehicle When You Work in Car Sales

Over a prolonged period of time, the cost of leasing a vehicle may exceed the cost of financing a vehicle. Financing requires a higher down payment, and the monthly payments can be significantly higher, but if a client chooses to finance, they will eventually own the car outright. In auto sales college, you’ll learn that financing also allows the client to build equity that can eventually be used to purchase a new vehicle or even sell the car.

When a person finances a vehicle, that person has the liberty to make changes and customize the car because it belongs to them. When a vehicle is financed, the driver can also accumulate as much mileage as they want without incurring any penalties.

Another thing that your client will want to consider is repair costs. Once the warranty on the vehicle expires, the client will be responsible for assuming all the different repair costs. A standard warranty usually lasts about three years or 60,000 kilometers.

Want to learn more about automotive sales careers?

Call the Automotive Training Centres today!