Our team came across a lessor’s sales brochure recently and were frankly offended by their warm and fuzzy marketing language, which is very misleading to a potential lessee. Their cozy assurances of protection, management, and efficiency are merely misdirection for their talons capturing the lessee into their leasing captivity.
While there are several misnomers in the brochure, we want to highlight and discuss the three above.
1. Price Protection Analysis
- A noble effort to attempt to provide value on a topic they have minimal knowledge. By querying make/model numbers across their database, suddenly they are experts that can offer advice on your equipment pricing, while neglecting the intricacies of equipment specifications, customer specific discounts, buying power, OEM price changes, etc.
- Result: By shifting your focus to other topics, they can keep your focus away from their rates and conditions.
- Fun Fact: The leadership for this company defected from a much larger leasing company and actively borrows from their practices, such as this.
2. Proprietary Management System
- This is an open request to let them deeper into your leasing livelihood. They now have access to their competitor’s vital leasing information (end dates, lease rates and conditions) to aid their sale’s funnel.
- Result: Their sale’s team will be more aggressive and targeted to expand their portfolio to new locations and asset types from this newly created uneven playing field. Captive propagation at its finest.
3. Useful Life Assessments
- Again, this is a lessor with a prominent stake on the return on investment (ROI) of that asset. Of course they want clearance to investigate opportunities to increase their profitability at your expense.
- Result: If it is not clear yet, the fox is in the hen house. Be prepared to hear how you can extend your lease term or avoid/reduce pending lease end charges by giving them your renewals.
- Pro Tip: Do not fall prey to the “no hourly overtime charges”. That is a common chargeback due to lessee mismanagement; however, the lessor still has plenty of claw backs in their Master Lease Agreement (MLA) to ensure their ROI targets are met.
After diagnosing their mindset and intentions, should we advise you to demand more from your leasing partner? Absolutely not. First things first – remove the conflict of interest! Do not take advice from people with selfish initiatives and incentives. Everyone wants to hit the easy button, whether it’s single sourcing, convenience bundling, or maintaining the status quo.
Want to have an eye opening, unique experience filled with transparency and insight? Send us an email to start your journey. Our decades of experience has allowed us to witness all the games being played in the industry and provide your roadmap to success.
