Down Payment, Installment Amount, Due Date: Getting Your Lease Sale Policy Right
Three numbers determine almost everything about how healthy a lease sale will turn out to be: the down payment, the installment amount, and the due-date schedule. Get these right at the point of sale, and recovery mostly takes care of itself. Get them wrong, and no amount of chasing later will fully fix it. Down payment is your first and best risk filter. A meaningful down payment does two things: it reduces how much you're financing, and it filters for customers who are genuinely able and willing to commit. A down payment that's too low to matter to the customer often correlates with a customer who won't feel much loss if they stop paying later. This doesn't mean down payments should be uniformly high — it means they should be a deliberate, branch-level policy decision, not an ad-hoc negotiation at the counter. Installment amount should match real repayment capacity, not just divide the balance evenly. It's tempting to simply divide the remaining balance by a round number of months. A better approach considers what a customer in that product category can realistically pay each month without straining — a slightly longer term with a comfortable monthly amount usually outperforms a shorter term that pushes a customer past what they can sustain. Due dates need to be predictable and correctly calculated. A due-date schedule that's inconsistent — sometimes landing mid-month, sometimes at month-end, depending on when the sale happened — creates confusion for both customers and your recovery team. Schedules should be calculated consistently, using correct local-calendar logic, so "due next month" always means the same thing regardless of when in the current month the sale was made. Multiple products, one clear plan. When a sale includes more than one product — the main item plus accessories or a warranty — the customer should still see one clear combined plan, not several confusing separate obligations they have to track themselves. Review your policy against actual outcomes, not intuition. The businesses that consistently keep low default rates review their own historical data periodically — which down-payment ranges and term lengths actually correlate with on-time payment — and adjust policy accordingly, rather than relying on gut feeling that hasn't been checked against results in years. Get these three numbers right at the moment of sale, and you've already done most of the work that determines whether an account becomes a smooth, predictable repayment relationship or a recovery headache six months from now.
