FARMINGTON HILLS, Mich. — The current health and future viability of leasing has been a hot topic in the auto marketplace lately, as leasing levels throughout the industry dipped last year but are now showing a bounceback. 

Sharing some perspective from the luxury side of the market with Auto Remarketing this week was Jeff Gartland, director of remarketing for Mercedes-Benz Financial, who talked about the state of leasing at his automaker.

"Mercedes-Benz USA leasing penetration is typically in the 50-percent range of retail sales," Gartland told Auto Remarketing. "Mercedes-Benz Financial continues to support MB dealers for the long haul, in difficult times as well as good times. As a result, MBF is now financing three of four retail transactions at MB dealers in the U.S."

This was just one of several areas that Gartland addressed with Auto Remarketing following Mercedes-Benz Financial's upgrade of its First Class Finish lease vehicle-turn in process that it announced earlier in the week.

Gartland also talked about the Loyalty Accelerator Program and the benefits it serves to dealers.

"Periodically throughout the calendar year, Mercedes-Benz USA provides Loyalty Accelerator Programs for customers who use Mercedes-Benz Financial to lease or finance their vehicles," he noted.

"For example, a program for the month of February stipulates a dealer can waive up to three payments on selected Mercedes-Benz vehicles when the customer either finances or leases back through Mercedes-Benz Financial," Gartland continued.

"Ideally, when the customer comes in to complete a pre-Inspection 90 days before the end of their lease, they will immediately take advantage of this program, which is in effect through the end of February 2010," he added.

Enhancements to Lease Turn-In Process

As announced earlier this week, Mercedes-Benz Financial upgraded its First Class Finish lease vehicle turn-in process by providing the automaker's dealers with new software on their hand-held Dynamic PDA devices. The goal quite simply is to make the turn in process run quicker and more efficiently.

These PDA devices were provided to Mercedes-Benz dealers by the OEM last year, and have been used for such purposes as pre-delivery inspections of vehicles.

"The PDA unit was initially intended to assist the dealers with their pre-delivery inspection of new vehicles," Gartland explained. "Through the partnership enjoyed between MBUSA and MBF, the inspection process was added."

Mercedes-Benz has given dealers anywhere from one to four of these devices, based on the size of the individual store.

Officials explained that the new software begins a series of technological upgrades for First Class Finish, which was launched in 2009.

Basically, dealers can scan the VIN of returned leased units through the PDA to begin the final inspection, which is the first step in the new lease turn-in process.

In the previous process, this task would take 30 minutes, but now it only takes 15.

"This technology is beneficial to both the customers and the dealers because it eliminates paper forms for the dealer and is a much faster and efficient process for busy customers," Gartland stated. "We see a great opportunity to end the paper process and replace it with a green process that benefits everybody."

Mercedes-Benz dealers began using the First Class Finish process was in the second quarter of 2009.

It can eliminate vehicle's final inspection by an independent third party and is designed to provide greater clarity to customers via more communication with the dealer.

"Our dealers indicated loud and clear that they wanted increased participation in the customer lease-end experience," Gartland told Auto Remarketing. "The process changes we have made, which are now being enhanced with the PDA, are a great first step in both maximizing customer satisfaction and providing the dealer with sales and service opportunities.

"The upcoming improvements will only add to an already good process," he added. "We will continue to push the envelope to match our customers' expectations of the Mercedes-Benz brand."

Specifically, the new process:

—Adds a brief pre-inspection at the originating dealership at about 90 days before the end of the lease term.

—Allows final inspection at any Mercedes-Benz dealership at the end of term.

—Provides final documentation and billing to the customer on the spot instead of several weeks after turning in the vehicle.

—Explains all applicable charges to the customer.

—Allows dealers to pre-inspect the vehicle, discuss the condition with the customer and determine the customer's future intentions.

—Gives customers a preview of brand new product at the dealership.

—Lets customers know if they are eligible for loyalty pull-ahead programs, which may waive the remaining obligation on their current lease.

"The best-case scenario that benefits the customer, dealer and Mercedes-Benz Financial is if the customer comes in for the pre-inspection, discovers that they qualify for a pull-ahead loyalty program and they drive home in a brand-new vehicle," Gartland shared.

Moving on to discuss the PDA in more detail, Gartland noted: "For remarketing purposes, the PDA will be used for both the pre-inspection, which is completed by the dealer before maturity, and the final inspection, which is done when the customer turns in the vehicle. 

"The PDA unit enhances both inspections because of the speed and accuracy. It replaces a paper process, so it is also environmentally friendly," he added. "The inspection process itself allows the dealer to fully engage with the customer at lease end, with the primary goal of maximum brand loyalty and service opportunities."

Looking at other benefits to dealers, he added: "Other benefits include increased customer satisfaction (quicker process), accuracy in identifying the unit being turned in (VIN scanning) and identification of factory added equipment, to assist with the inspection.

"The PDA also has the ability to be enhanced to include value added items like photographs of damage, signature pad for inspections and odometer statements, credit card processing for lease-end charges and printing capability," Gartland shared.

Not to mention, all of this can aid dealers in filling their used inventory more efficiently.

"The lease-end process and the enhancement provided by the PDA fits perfectly with our strategy to give our dealers the opportunity to purchase our off-lease vehicles before they reach the auction," Gartland noted. "The dealer can save time and money purchasing units both as the customers turn them in and online before they hit the auction lanes."