USED CAR LEASING – Know what you should Know!

With regulations getting tighter and tighter in the BHPH industry, it wasn’t a surprise to see more and more car dealers turning to Used Car Leasing.

One thing to keep in mind as you begin looking at Used Car Leasing programs, is that all programs are not alike.  Even though the concepts are similar, the program and protection for the dealers can be very different.  It’s important to know the facts.  

Northland Auto Enterprises, Inc. developed the original used car leasing program almost 30 years ago.  We have the experience and the  proven success of knowing what ingredients are necessary to have in a Used Car Leasing program.  

Here are a few areas you should investigate with any Used Car Leasing program.  It’s important to know what you should know.


The Lease Agreement must be Reg. M compliant.  

A “one lease fits all” approach should send up a Red Flag! 

Northland has done extensive research on leasing laws and has worked in conjunction with reputable law firms through out the  United States to ensure that our contract is compliant.  

Northland will defend the Lease’T’Own contact, at our expense, if it were ever to be challenged by a state agency.

This research and backing relieves you from the extra expense of hiring someone to do the work and the risk that you may have missed something critical.  


The Used Car Leasing business model should operate as having the Dealership remain titled owner of the vehicle until the customer acts on the purchase option.  

In some states, it’s appropriate to list the customer as the lessee on the registration during the term of the lease.

Being the titled owner of the vehicle provides the dealership with leverage and is your best defense against bankruptcies, repossessions, and delinquent payers.


Some dealers think that their customer’s insurance is all that’s necessary for a leased vehicle.  This couldn’t be further from the truth!  Keep in mind that the primary insurance is intended to provide physical damage coverage for the vehicle and liability protection from the driver.  It DOES NOT cover a legal award for damages brought against the dealer as owner of the vehicle.  

For example, your lease customer causes an accident in which someone dies and there is a million dollars in damages.  The primary policy has a $50,000 limit,  Who pays the rest?  As titled owner of the vehicle, they will go after you! 

In order to protect you, the dealer, Northland offers $1 Million dollars of Contingent Liability Insurance coverage at affordable premiums. This coverage is intended to protect your interests from a law suit brought against you as a result of an accident with your Leased vehicle.

This coverage also provides legal defense for law suits brought against you, as the titled owner, for damages caused by your customer. Legal defense often costs vehicle owners $30,000 – $50,000 dollars even if the other party doesn’t win!!

Northland’s Contingent Liability Insurance is NOT a replacement for your Garage Keepers Liability coverage. You need to keep your regular Garage Keepers coverage.


Northland assists the dealers with tracking of their customer’s insurance status at no additional charge.

Certain endorsements are added to the customer’s policy to ensure that Northland will be notified of any change of status on your customer’s policy.

Should a policy lapse or be cancelled, Northland sends notification to the customer with instructions to re-instate the insurance or return the vehicle to you.

Northland also provides the dealer once a month with a snap shot of their Fleet. This snap shot allows the dealer to easily identify any vehicle that puts them at risk due to improper insurance so they can take action.

In addition, dealers have access to professional Northland Customer Service Representatives who are empowered and motivated to assist the dealers in resolving insurance related issues.


Because each state is different with their laws and expectations, it’s important that dealers aren’t given a generic or high level training. This is not the place for a one size fits all on-line training video.

Northland personally trains each dealer and appropriate staff members to ensure they understand the program and understand how to correctly fill out the lease agreement and other documents.

Refresher training is available at no cost which comes in handy as new employees come on board.

Northland’s employees have a wealth of experience in many areas such as the auto industry, working with state agencies, state statutes including taxes, insurance, GPS, warranties, marketing, etc…

These experienced employees are at your service! 

If you have a state agency claiming that you aren’t compliant, Northland’s expert will step in and assist on your behalf.

If you have an insurance claim that’s being denied, Northland’s expert will step in and assist on your behalf.

If you are notified that your vehicle has been included in a customer’s bankruptcy, Northland’s expert will step in and assist on your behalf. 

If you need help in any area of our Used Car Leasing model, we will do our best to provide it! Our goal is to help you succeed!

Used car leasing programs can also benefit from enhancements such as:

  • Daily Rentals/Loaner Cars
  • Coverage Plus – a Physical Damage Protection program
  • GPS tracking devices
  • Warranties
  • Dealer Management Software
  • Automated Collection Services
  • Dealership and Shop Supplies

Northland partners with several companies to provide these quality enhancements.

There are also several key benefits that the right Used Car Lease program will bring to your dealership.  

  • If you treat the customer right, you’ll have these customers for life by “rolling” them from one lease vehicle to another!  You’ll also have their friends and families as customers from referrals. 
  • You become the hero of the community by being able to work with customers that other dealers have turned down.
  • You own the vehicle so “repossessions” aren’t necessary.  You simply recover your property. 
  • Tax benefits!  Income Tax is paid only on the payments collected rather than being paid on the full amount of the deal at the end of the first year. The dealership owns the car so depreciation can be taken.  Request a personalized Profit Analysis based on your specific Federal and State income tax rates.  
  • Used Car Leasing can bring in profits much higher than retail sales, wholesale, or BHPH. 

Bottom line, don’t re-invent the wheel and don’t settle for an impostor program!

Northland’s Lease’T’Own® programs have been in place and successfully operated by dealers throughout the United States for almost 30 years.