There is likely to be about a 20-percent year-over-year increase in lease pull-ahead program options this year, predicts Swapalease.com, which might explain the following sentiment:

If 2013 was the “Year of the Lease,” then 2014 could very well end up being the “Year Of The Lease Pull-Ahead,” the company suggested in analysis released this week.

These types of programs typically present the lessee with a “forgiveness opportunity on what’s remaining on the contract” and ordinarily are offered when the lessee has less than five months to go on the lease, Swapalease said.

In recent years, Swapalease executive vice president Scot Hall explained, pull-ahead programs are often focused as being a means for getting more used cars on the dealer lot, particularly the certified pre-owned variety, which these programs are “perfect for,” he said.

That’s not necessarily the No. 1 motivator this time around, Hall says; it’s more about the new-car side and keeping these lessees within the same brand family.

A lease pull-ahead program is actually cheaper for all parties involved, he said. The customer is not the only one to get a deal; the automaker/dealer also does not have to spend as much on retention efforts.

And there are some macro-market factors at play here, too: as the rate of new-car sales growth slows down, automakers are looking for ways to spin the turn-rate spinning fast, and lease pull-aheads help to accomplish this task.

Additionally, with lease penetration rates at all-time highs, these programs can serve as ways to continue elevating those levels, Hall said.

“Swapalease.com is an advocate of lease pull-ahead programs, and the company’s ‘lease transfer’ marketplace pioneered the flexible lease contract option nearly fifteen years ago,” said Hall. “Today, thousands of lease drivers use the service as a way to escape their current contract in order to immediately turn around and shop for a different vehicle that meets their new automotive needs.”

‘Great Tool’ for Inventory Management, Loyalty

One of the brands Swapalease mentioned as having run a lease pull-ahead program in 2013 was BMW.  

Auto Remarketing connected with Joel Nash, the head of pre-owned vehicle sales and corporate fleet for BMW of North America, who explained the many benefits his brand saw from utilizing such a program.

Although BMW did not have specific numbers as to how much incremental CPO supply came from pull-aheads, Nash said “clearly it had a positive effect on both volume and reduced dealer inventory volatility.”

And the pluses go beyond supply, too.

“Pull-ahead programs are a great tool to manage the supply of the CPO inventory and at the same time promote customer loyalty,” Nash said.

“Pull-ahead programs are primarily used by BMW as a strategic tool to control the supply of CPO vehicles for our dealers and are a very important pillar to the success of our pre-owned business,” he continued.

“We can lever the off-lease volume taking into account not only seasonality in customer demand, but also ensure that resources in our BMW Centers are used as efficiently as possible across all fixed and variable operations,” Nash added.

“High volatility in off-lease volume creates challenges in the resource planning for dealerships. With pull-ahead programs, we have a tool in place to reduce the volatility month-over-month and smooth out peaks and valleys of off-lease vehicles,” he said.