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TRAC Lease
 

Why a TRAC Lease?
For eligible items of transportation equipment, the lessor and the lessee are able to establish a pre-determined end-of-term equipment value. A TRAC Lease is a True Lease with a Terminal Rental Adjustment Clause.

TRAC provisions can benefit the lessee in two ways. First, they allow the lessee to share in the residual sales value of the vehicle. Second, because the lessee effectively guarantees the vehicle’s residual value, the rentals to be paid during the lease term may be lower than
otherwise available.

A TRAC (Terminal Rental Adjustment Clause) lease is a modified Open End Lease limited to VIN numbered motor vehicles and trailers used at least 50% of the time for business purposes. It enables the customer to set the residual value of the vehicle at the beginning of the lease,
which is used to determine monthly payments.

  • Higher residual amounts = lower monthly payments = higher purchase options
  • Lower residual amounts = higher monthly payments = lower purchase options

TRAC leases have several options at the end of the term:

 
  • Purchase the vehicle for the residual value. The lessee receives an adjustment, or cash rebate, if the actual residual value at the end of the term is lower than what was chosen at the beginning of the lease. If it is higher, lessee will pay the difference.
  • Trade-in the vehicle or equipment to cover the remaining amount due
  • Return the vehicle to a designated location for disposal and settlement

Let us help you determine your best option and assist you with future leasing needs for your business.