The key to capturing returning lessees is coordinating communication through the right channels at critical moments in the auto shopping journey, sometimes starting as early as 12 months before lease end, according to Troy’s J.D. Power.
The J.D. Power 2021 U.S. End of Lease Satisfaction Study analyzed new-vehicle leasing trends as they compete against aggressive financing incentives for new-vehicle buyers, necessitating lease retention and conquest strategies.
“With such a high percentage of returning customers leasing again, the key to retaining those customers along with first-time lease customers is delivering the right proactive messaging at the right time via the right channel,” says Patrick Roosenberg, director of automotive finance intelligence at J.D. Power. “The more lenders, OEMs and dealers can coordinate their communications to connect with customers at the right moments in their leasing journey, the more likely they will be to develop strong, long-term relationships.”
The study found that 72 percent of returning mass market lessees and 68 percent of premium market lessees lease another vehicle when their existing lease ends. Among first-time lessees, those numbers drop to 50 percent and 57 percent, respectively.
Both returning and first-time lessees start considering a new vehicle as early as 12 months prior to the end of their existing contract and can be heavily influenced at this stage by proactive communication from lenders, dealers, and manufacturers.
Lease customers respond in a variety of ways to different types of communications from lenders, OEMs, and dealers at different phases in their customer journey. Coordination between these key players can have a positive effect on customer satisfaction and retention.
Inspections play a pivotal role in end of lease satisfaction. Addressing customer pain points or areas of opportunity in the lease return process can lead to a better experience and increase lease retention. Lenders need to coordinate efforts with lease inspection companies to ensure the best customer experience possible.
Honda Financial Services ranks highest in end of lease satisfaction in the mass market category with a score of 848 on a 1,000-point scale. Hyundai Motor Finance and Toyota Financial Services rank second in a tie with a score of 843.
The 2021 U.S. End of Lease Satisfaction Study identifies lease-end practices and timely marketing opportunities that optimize lease retention for the same brand and at the same dealer. The study is based on responses from 2,761 mass market and premium vehicle lease customers who are within six months of lease end. It was fielded from November 2020 through January 2021.
J.D. Power uses big data, artificial intelligence, and algorithmic modeling capabilities to understand consumer behavior. It has offices in North America, Europe, and Asia Pacific.