Lease Plan Segmentation for Vehicle Turnover
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Solution Overview
Problem
Users tend to continue leasing used vehicles until the contract period expires due to the burden of premature cancellation fees, discouraging early vehicle replacement.
Innovation Solution
An information processing apparatus and method that presents lease plans for new and used vehicles, offering a first plan with an initial cost but no premature cancellation fee, and a second plan with no initial cost but a premature cancellation fee, while only presenting the first plan for used vehicles to minimize cancellation fees and encourage early replacement.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If a user leases a used vehicle with a standard lease plan that includes a premature cancellation fee, then the leasing company protects its revenue from early contract termination, but the user faces financial burden that discourages vehicle replacement before contract expiration
Solution Approach 1:
The lease plan is segmented into distinct components: initial cost, monthly lease fee, and premature cancellation fee. By offering a plan structure where the initial cost is higher but premature cancellation fee is reduced or eliminated, the system allows users to segment their financial commitment according to their need for flexibility versus upfront cost savings.
Solution Approach 2:
The system changes the parameters of the lease plan by adjusting the distribution of costs between initial cost and premature cancellation fee. Different parameter configurations are offered: one with high initial cost but low cancellation fee, another with low initial cost but high cancellation fee, allowing users to select based on their specific needs for vehicle replacement flexibility.
2Ease of operation
If a user continues leasing the same vehicle until contract expiration to avoid premature cancellation fees, then the user avoids additional costs, but the leasing company loses opportunities for vehicle turnover and repeat business
Solution Approach 1:
The system introduces dynamic lease plans that can be selected at the beginning of the contract, allowing the terms (initial cost vs. cancellation fee structure) to be customized based on user preference. This dynamic approach enables users who value flexibility to choose plans with lower cancellation fees, thereby encouraging vehicle replacement without forcing all users into rigid long-term commitments.
Solution Approach 2:
The system offers a lease plan with excessive initial cost requirement in exchange for reduced or eliminated premature cancellation fees. This partial action approach allows users to pay more upfront if they anticipate needing flexibility, while the leasing company recovers potential cancellation fee revenue through the higher initial cost, thus maintaining overall revenue while enabling vehicle turnover.
3Adaptability or versatility
If the leasing company offers multiple lease plan options with different fee structures, then user choice and satisfaction increase, but the complexity of lease plan management and selection increases
Solution Approach 1:
The complex lease plan structure is segmented into clear, distinct components: initial cost, monthly lease fee, and premature cancellation fee. Each component is explicitly defined and can be independently adjusted, allowing the system to offer multiple plan variations while maintaining clarity in the structure. This segmentation makes it easier for users to compare plans and understand the trade-offs between different fee structures.
Data Source
AI summary
A controller is provided which is configured to: output, as lease plans for a new vehicle, a first plan in which an initial cost is incurred but a premature cancellation fee is not incurred and a second plan in which an initial cost is not incurred but a premature cancellation fee is incurred; and output only the first plan as a lease plan for a used vehicle.