In a pioneering move, the 10-store Van Horn Group now leases used cars.

The 10-store dealership group in Plymouth, WI, began doing it to serve more customers and expand its pre-owned vehicle inventory, says Mark Watson, vice president-variable operations.

Used-car leasing is something of a rarity. But more and more dealers – such as George Glassman of the Southfield, MI-based Glassman Automotive Group – say it’s a good idea whose time has come and manufacturers should get behind it to help remarket waves of vehicles coming off-lease. That number is approaching 4 million a year.   

Watson, Van Horn’s former F&I director, says used-car leasing is worth it, but an earlier attempt at subprime leasing there did not work out.

The employee-owned dealership group has much used-car sales and vehicle-leasing experience, because it operates a buy-here/pay-here as well as a fleet-leasing company.

“We are trying to create with used vehicles a unique position, one that allows us to put the client into more vehicle at a lower payment through a lease,” he says.

Dealerships down the street who don’t offer used-car leasing may not be able to do that, he adds. “It gives us one more stab at winning the customer’s business.”

The Van Horn Group retails 13,000 vehicles a year, 70% of them used.

“When you serve a broad range of customers from 600 (credit score), and up, you need to provide options,” Watson says.

The new program focuses on customers with credit scores on the B and C tiers. It uses Wisconsin Consumer Credit, a leasing arm of the Van Horn organization. Eligible are current model-year vehicles to those with model years dating back three years. Maximum mileage is 50,000.

“Used car leases are an additional revenue opportunity and keep relationships strong with the bank,” says Tonya Stahl, Wisconsin Consumer Credit’s vice president-operations. “It helps us exceed customer expectations by providing flexible finance options for a successful and continual business relationship.”

Used-car leasing has another advantage. It helps Van Horn build consistent used-car volume.

“By leasing, we’re recycling these vehicles, meaning clients use them for a specified period and we get them back at a predetermined price,” Watson says. “That is one less vehicle we have to hunt for on the auction block. We’re excited about the opportunity used-car leasing presents.”

Upon lease return, the vehicles are again reconditioned and then moved to the retail lot for sale.