Purchase

Reasons Why you might choose retail financing

Which of these categories best describe your current situation:

First-Time Buyers: First-time buyers are looking to build equity and a credit history. Retail financing and its flexible credit guidelines will be attractive to these buyers. If this applies to you please visit the following website for information about your financing options.

Click here for First Time Buyers Financing options that could help you get into your first truck with approved credit.

The road belongs to you... Shouldn't the truck? Get rolling with a quick easy credit application today by clicking here.


Owner-Operators: Tax advantages and the opportunity to build equity make ownership, through financing, attractive to this type of customer.  If this applies to you please visit the following website for information about your financing options. www.selectyourtruckdeal.com


Fleet Customers: Some fleet buyers choose retail financing for specific business or tax reasons. You are on the correct site for this type of need.

Principles of Leasing (This principal is designed for the fleet owners)
*Many of our leasing options have minimum requirements of 10 trucks or more existing .


Introduction

Leasing is a means to pay for the use of a new tractor or trailer. It has gained popularity in recent years because it generally offers a lower payment than ownership and financing, and because it offers certain tax advantages to the owners of the equipment. In a lease agreement, the customer (the lessee) pays a monthly lease payment to the owner of the truck (the lessor) over a specified period of time. The lessee has possession of and right to use the truck, while the lessor retains ownership (the certificate of title) of the truck and related tax benefits (accelerated depreciation).

Leasing Overview

Leasing has a "language" all its own, but many of the terms are similar to the terms used in retail financing. Let's take a closer look at how these basic elements of leasing differ from their retail-financing counterparts.

Capitalized Cost or Cap Cost

This is similar to the sales price. Technically the capitalized, or cap, cost refers to the total value of the capital, that is, the truck. (The term is used since there is nothing actually being sold in a leasing agreement.) Think in terms of sales for a moment. If we agree to a cost of $92,000 for a new truck, that $92,000 is the total sales price for a retail-financing contract. When we talk about leasing, we use the term capitalized cost.

Capitalized Cost Reduction

This is the legal term for payment or trade equity that the lessee provides up front to reduce the capitalized cost. Basically, it is a "down payment" on the lease. Most leases require some sort of "down payment" or capitalized cost reduction.


Adjusted Capitalized Cost

This is the cap cost minus any cap-cost reductions. Again, think back to familiar terms. With a retail finance contract, you take the total sales price and subtract the down payment to get to the amount to finance. With a lease, you take the capitalized cost and subtract the cap-cost reductions to arrive at the adjusted capitalized cost.

Residual Value

This is the predetermined value of the truck at the end of the lease. This is a prediction of what the truck will be worth at the end of the lease term. It depends on a variety of factors, including the number of miles the customer believes he or she will drive, the projected used truck market at the end of the lease term, and more...

Payment Factor

This is the number provided by the lessor to calculate monthly payments on leases.
Implicit Rate or Implied Rate

This is the leasing equivalent of an interest rate.

Monthly Payment in Arrears

This refers to leases in which the first monthly payment is paid after the lease inception date, all lease documents are signed, and the customer takes delivery of the truck. This results in a slightly higher monthly payment to cover the additional time before the first payment.

Monthly Payment in Advance

This refers to leases in which the first monthly payment is due at lease inception. This up-front payment results in a slightly lower monthly payment than payment in arrears.

Term

This refers to the number of months the lessee will use the truck and make monthly payments.

Different types of leases assign responsibility of the vehicle's residual value to either the lessee or the lessor. Knowing which is best for you customer is best left to your accountant.

You the customer can choose from two types of leases most common in the industry or a unique TRAC lease variation offered by Daimler:

Trac Lease

These leases are often referred to as a finance lease for accounting and financial-reporting purposes. Characteristics of this type of lease generally include:

The lessee is responsible for the vehicle's residual value at lease maturity and has the following options at the end of the lease:

The lessee can pay the lessor the residual value and keep the truck.
Or
Either the lessee or lessor will sell the truck at lease maturity.


If the actual selling price is below the predicted residual value, the lessee owes the difference to the lessor. If the selling price is above the residual value, the lessee keeps the difference.

We offer TRAC Lease, modified TRAC Lease and our unique Zero TRAC Lease, all with variations in terms and residuals to accommodate your financial requirements. And if you are a municipal buyer, our municipal lease program meets the tax requirements to qualify for extremely low effective rates.

Fair Market Value "FMV" Lease

• Low initial cash outlay
• Low monthly payments compared to conventional straight financing
• Short-term FMV leases are a smart alternative to short-term ownership
• Multiple lease terms ranging from 24-36 month terms
• Like-spec'd trucks with similar terms are readily available
• "Off-balance sheet" treatment may be available**
• Lease financed through Daimler Truck Financial, SelecTrucks' preferred finance provider

A SelectLease used truck lease can make a real difference to your fleet's bottom line. To find out how, call us directly @ (866) 668-5156

Closed-end or Fair Market Value (FMV) Lease

These leases may be referred to as an operating lease or "true" lease. Characteristics of this type of lease include:

The lessee has no residual-value responsibility (that is, he or she walks away from the contract).
The lessee does have turn-in-condition responsibility (includes mileage, tires, body damage, and excess wear and tear).
The lessee usually has three options at the end of the lease:
Return the vehicle, meeting trade terms and conditions.
Extend the lease.
Purchase the vehicle at Fair Market Value, determined by the lessor.

When is Leasing Your Best Solution?

Wants lower monthly payments
Attracted to tax or accounting advantage of leasing
Interested in a shorter trade cycle
Not interested in ownership
Wants to preserve operating lines of credit
Wants to match costs to benefits of the truck's use over the term

Who typically can benefit from leasing options:

Large fleet buyers
Experienced owner-operators
Small- to medium-sized fleet buyers
Medium-duty buyers
Tax exempt entities, such as state, city, county, and other municipalities
Timely credit approvals rely heavily on the accuracy and completeness of the information submitted to the financing company.

Essential information needed on the credit application includes:

Your full name and address
Social security number or Federal Tax ID
Current employment, including phone numbers, contact names, and length of employment
Previous employment, if current employment is less than two years
Number of years in the trucking industry
Credit references on previous and current installment loans (especially truck credit), with phone numbers and account numbers

Credit History

Credit Bureau reports are used to your credit:

Prior truck-credit experience.
Length of time in the bureaus' records.
Comparable credit (bank, finance company, and/or credit union loans).
Prior favorable payment history.
Any other credit information that might not show up on bureau reports (local bank loans) should be provided on your customer's credit application.

SelecTrucks of Kansas City's Finance & Insurance manager, Jeff Green, can be a valuable resource in understanding many aspects of financing and leasing. Jeff Green is a financing expert who should be involved in all matters concerning financing and leasing. It is the his responsibility to communicate with lenders, provide information back to you regarding your financing options.

Many credit decisions are turned around in less than 24 hours, sometimes even quicker. The primary key to quick turnaround is almost entirely tied to the degree of completeness of the credit application and supplemental information provided to DC Truck Financial.

This retail fleet finance program offers:

• Down payment as low as ZERO for creditworthy fleet buyers
• Low, competitive fleet-oriented finance rates
• A simplified credit application process
• Quick credit decisions based on transaction size
• Availability on transactions of 10 or more units or for fleets with 10 or more units

When you finance a truck, you normally pay money at delivery, known as the down payment, and then pays for the remainder throughout a series of payments - usually monthly payments. In addition to the price of the truck, (you) the purchaser also pays interest on the contract.

Example
If your main concern is monthly cash flow. Here are some ways to lower your monthly payment.

Increase the down payment. If you can increase your down payment, it would reduce your amount to finance and, in turn, your monthly payments.

Lower the interest rate. Interest rates are usually based on the type of equipment being purchased, your credit history, and the deal structure. The finance company may not have a complete picture of your credit worthiness. Many times communication with a Qualified finance and insurance manager is a key factor.

Extend the contract term. Even though you may prefer a four-year loan, a slightly longer term may reduce your monthly payments by 15 percent. Again, this involves approval from the financing company. There are customer qualifications and restrictions that may apply.

Add a balloon payment.
A balloon payment added to the end of the contract will lower monthly payments.
Leasing the truck maybe an option for experienced credit worthy owner operators, but is Generally best suited for fleet and vocational customers.