Your customer's first lease invoice arrives with an extra monthly charge of $31 for insurance. What if your customer calls you for an explanation? What will you tell them? If you are not familiar with the lease terms and conditions you won't have an answer. Today every sales person must do more before and after the sale to make sure customers return.

Some dealers include insurance in their monthly payment. Some throw in the property taxes. If your proposal does not include taxes or insurance, your payment should be lower than the "all-inclusive" lease payment program. You need to help your customer compare various alternatives. When you do this, you are a great business partner and advisor.

Know Insurance facts:
All equipment on a lease must be covered by physical damage insurance. In addition, most leasing companies (Lessors) require general liability insurance coverage in case a Lessee's employee is injured by the equipment.

If the Lessee does not provide proof of insurance before the lease commences, the leasing company will provide coverage.

If the Lessor obtains the insurance on behalf of the Lessee, it is usually at a high rate.

Help Customers Compare Options
Leasing company insurance is always at a higher price than that which your customer could secure from their insurance provider. When companies add new equipment, premiums seldom increase, unless your customer has little equipment or everything they have is old.

The coverage that the "all-inclusive" payment plan provides is rarely as complete as that which your customer's insurance agent writes. Usually it's enough to cover the leasing company's financial loss. It does nothing for your customer if their production is disrupted, business is lost or someone is injured during the equipment failure.

Be a Customer Lease Advocate
One Kansas City company was billed an insurance premium for nine months. The leasing company never made it clear to her that she would be billed for insurance if she did not send them proof of insurance. The company CFO noticed the insurance charge on the first lease invoice. She protested the charge with the leasing company and sent them the necessary proof of insurance.

It took 9 months to stop the insurance billings. During that time, the leasing company billed late charges for not paying the insurance portion of each invoice. Her equipment sales rep was not interested in helping with the insurance problem and did not view it as part of their customer service responsibility. That approach may no longer works in the graphic arts marketplace.

Service after the sale again means more than making sure the machine works when the installation is complete. Be an ally and partner. It pays.

DC

Part Two of "All Is Fair In Love, War and Taxes" will appear in the March Issue of Dealer Communicator

Mary A. Redmond provides highly specialized information for corporations, managers and dealers who negotiate and manage leases. With 28 years in the leasing industry, including 21 working for the largest leasing companies in the U.S., Mary knows leasing. You may reach Mary at 913-422-7775 or mary@reviewyourlease.com