Was thinking about this the other day - why does no one offer leasing or a trade up program for SCUT or UTV's. I get there are limited leasing programs aimed at corporate accounts but I am talking about the average home owner/user.
Seemingly, a lease program would be MORE profitable than a 4-5-6 year "zero interest" program. Offer 3 year leases with a full warranty/service included with a set number of hour usage. Set the lease payment at roughly what you are offering on a 4 year payment...and then a buy out to a number thats roughly equal to 4 more years payments at zero interest. You guarantee your self a source of clean, well maintained (with records) used inventory and you also build a loyal customer base of people buying more than 1 unit. Now it won't interest all those "buy it once, last a lifetime" buyers - nor will it likely interest those who are die hard DIY on the upkeep, but as a dealer those are not your profit centers to start. You make more money off that guy who upgrades every 3-5 years and has you do all their upkeep. Problem is, those buyers are the white whales of tractor sales - and every dealer is going whale hunting it seems, so when they upgrade there are some places tossing incentives that others cannot match.
Now as to a trade up program - look at Harley-Davidson for a good example. H-D has found the used market for their recent bikes so soft lately, that they introduced a trade up program. Basically the program came about because the die hards are not upgrading, and the new riders are bypassing their big bikes for smaller and sportier here in the US, and developing countries have no interest in the big bikes. To combat the perception of bad resale, they offer a promotion on new purchases where you can "upgrade" your bike by turning it back in within 24 months for 100% of price paid when buying a bigger/more expensive bike. Jewelry stores do the same thing - buy a ring today, "upgrade" the stone up to your 5th anniversary...basically they are acknowledging resale is so bad - but giving you an option to trade up without losing big.
Now I don't think these programs would interest the big boys and their larger units - they have a buyer base and they have good resale. But what about lesser known brands and smaller home owner sized units. Personally, I would be cautious buying a lesser known makers product - for fear of resale, but perhaps if the knowledge I could trade up in a few years to something bigger if I choose, it might help ease some concerns. Likewise, look at how many UTV's you see out there 3 or 4 years old, low hours and looking like new. Buyers of these expensive toys could be a great audience - sell them once and then convince them every 3 years or so your new technology is somehow light years ahead of where it was on their products and they REALLY need to upgrade. Ditto SCUT buyers, these are profitable little units for dealers and manufacturers overall. Granted the markup on these is small compared to a larger utility tractor - but you can sell 6-10x more units easily, even if you only make a 1/3 of the $$ on each of them compared to their larger cousins.
The internet has changed the game for dealers of anything. What was once time consuming to comparison shop is now a simple google search. If your customers are shopping by price alone, if you aren't lowest your lonely. Offering something no one else offers brings people in the door - and any good salesperson will tell you they just need them to cross into their showroom.
Seemingly, a lease program would be MORE profitable than a 4-5-6 year "zero interest" program. Offer 3 year leases with a full warranty/service included with a set number of hour usage. Set the lease payment at roughly what you are offering on a 4 year payment...and then a buy out to a number thats roughly equal to 4 more years payments at zero interest. You guarantee your self a source of clean, well maintained (with records) used inventory and you also build a loyal customer base of people buying more than 1 unit. Now it won't interest all those "buy it once, last a lifetime" buyers - nor will it likely interest those who are die hard DIY on the upkeep, but as a dealer those are not your profit centers to start. You make more money off that guy who upgrades every 3-5 years and has you do all their upkeep. Problem is, those buyers are the white whales of tractor sales - and every dealer is going whale hunting it seems, so when they upgrade there are some places tossing incentives that others cannot match.
Now as to a trade up program - look at Harley-Davidson for a good example. H-D has found the used market for their recent bikes so soft lately, that they introduced a trade up program. Basically the program came about because the die hards are not upgrading, and the new riders are bypassing their big bikes for smaller and sportier here in the US, and developing countries have no interest in the big bikes. To combat the perception of bad resale, they offer a promotion on new purchases where you can "upgrade" your bike by turning it back in within 24 months for 100% of price paid when buying a bigger/more expensive bike. Jewelry stores do the same thing - buy a ring today, "upgrade" the stone up to your 5th anniversary...basically they are acknowledging resale is so bad - but giving you an option to trade up without losing big.
Now I don't think these programs would interest the big boys and their larger units - they have a buyer base and they have good resale. But what about lesser known brands and smaller home owner sized units. Personally, I would be cautious buying a lesser known makers product - for fear of resale, but perhaps if the knowledge I could trade up in a few years to something bigger if I choose, it might help ease some concerns. Likewise, look at how many UTV's you see out there 3 or 4 years old, low hours and looking like new. Buyers of these expensive toys could be a great audience - sell them once and then convince them every 3 years or so your new technology is somehow light years ahead of where it was on their products and they REALLY need to upgrade. Ditto SCUT buyers, these are profitable little units for dealers and manufacturers overall. Granted the markup on these is small compared to a larger utility tractor - but you can sell 6-10x more units easily, even if you only make a 1/3 of the $$ on each of them compared to their larger cousins.
The internet has changed the game for dealers of anything. What was once time consuming to comparison shop is now a simple google search. If your customers are shopping by price alone, if you aren't lowest your lonely. Offering something no one else offers brings people in the door - and any good salesperson will tell you they just need them to cross into their showroom.
