RENTALS ARE BOOMING
Interest rates can be expected to rise for the next 12-18 months, driving down the buying power of customers. Rental, leasing, and service will become key revenue drivers for dealers. With more new equipment landing in the 4th quarter of 2022 and returning to “normal” as OEM factories get caught up, more used equipment will be available on the market. Rental and used equipment will be an attractive option to customers looking to reduce the cost of farming. More dealers are also offering leasing and other “creative” financing options to make prices more palatable to customers because the cost of both new and used equipment is so high. According to a DIS survey of Ag dealers across North America, 47% of respondents offer rental equipment at their dealerships and an additional 6% plan on adding rentals to their roster in the year ahead. Meanwhile, 53% of respondents are planning to offer alternate financing options like leasing in the year ahead. If you are planning on launching or expanding your dealership’s rental operation, it’s important to right-size your rental fleet to address floor plan costs. STRATEGIC PARTNERSHIPS: YOUR DMS PROVIDER Your dealership management system can also be a key strategic partner to help you identify problems, develop solutions, and plan for the future. Find a DMS partner that isn’t shortsighted, giving you the lowest price, or selling you something cool in the system. Instead, find a partner who will work with what your long-term vision is and how aligns with your growth strategy.
STRATEGIC PARTNERSHIPS: YOUR OEMS Maintaining good relationships with OEMs is key to navigating the impact of supply chain shortages. Dealers should proactively renew partnerships with vendors and OEMs and work closely with them to project stocking needs and manage customer expectations. They should also talk openly about the status of supply and their needs and extend that courtesy to customers by clearly communicating and managing their expectations.
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