CARRUSLiNK

    Quick answer · Dealer ↔ leasing

    What is the dealer margin on leasing vs. financing?

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    TL;DR

    The dealer's margin on leasing is typically 8-15% of the monthly payment plus a residual value margin upon return (3-7% of the car's value). Financing typically yields a 1-3% kickback from the financing partner plus an interest kickback. On an average 4-year lease agreement, the dealer earns 18,000-35,000 kr more than on a comparable financed deal — provided the repurchase flow operates correctly.

    The primary reason leasing is more profitable is retention. A leasing customer has a hardcoded expiry date — whether in 36 or 48 months, they must return to the dealer regardless. A financing customer owns the car and can sell it anywhere. This means the leasing repurchase rate (35-50%) is structurally higher than the financing trade-in rate (15-25%).

    The second part is the ex-lease margin. When the car is returned, the dealer has the first right to purchase it at residual value — and can then sell it with an 8-15% gross margin. The dual transaction (new lease contract + used car sale) is the entire reason why lease dealers can outperform pure used car dealers in profitability per customer.

    Key facts

    • Leasing margin: 8-15% of payment + 3-7% residual value margin upon return
    • Financing margin: 1-3% kickback + interest kickback
    • Total over 4 years: ~18,000-35,000 kr more on leasing than financing
    • Leasing repurchase rate: 35-50% (vs. 15-25% financing)
    • Ex-lease vehicle = dual transaction (new contract + used car sale)
    • Prerequisite: 90-day repurchase flow must operate — otherwise margin is lost

    See ROI calculation for leasing vs. financing with your own figures.