At a Glance

• The trade-in is not an end-of-term administrative event. It is the renewal, and in a program with a defined replacement cycle it is the single most predictable new-deal trigger available.
• When the dealer owns the payoff conversation, the lessor learns the customer is upgrading at the point the buyout wire arrives — from a competing funder.
• Negative equity at trade is not a defect to be avoided. It is a structuring decision with a known cost, and pretending otherwise pushes the dealer toward funders willing to price it.
• Residual policy and upgrade capture are the same decision made in two different departments. A residual set conservatively for credit reasons is a residual that prices the customer out of an upgrade.

The Most Predictable Deal in the Book