The impact of COVID-19 has been strongly felt across all sectors in the US economy and every organisation is scrambling to retain the best talent whilst minimizing its costs when factoring in the possible long-term shocks from the current economic slowdown.
Similarly, the vehicle leasing and lease financing industry in the United States is not immune to the effects the novel coronavirus has been having on the economy.
Prices of automobiles have been rising due to fluctuating global oil prices, more expensive supply chains and materials used, as well as the increased production of hybrid and electric cars that are more environment friendly. As a result, lease financing has become a popular method of purchasing new vehicles in order to ease the burden of up-front payments.
Considering how the pandemic has thwarted us into an era of economic uncertainty, in this article we will look at key short-term action planning areas for lease financing companies to focus on to help their customers.
• Temporary increases in funding facilities, deferral of mortgage payments or interest rate holidays from banks and other lenders.
• Adapting to short-term change in customer behaviors and their request for cancellations.
• Increased emphasis on working capital management, including potential short-term changes to normal working capital management policies and practices.
• Continuing to utilize employees efficiently and managing the total people cost in the short-term.
These measures can help offset the impact of the pandemic on the American economy and ensure that auto leasing companies can retain not only their cash flow, but better relationships with their existing customers and become more efficient organisations by reducing excessively burdening costs.
