If a person wants to terminate their car lease which they have, doing so they will often incur some very heavy penalties from the leasing company. Today however, there are now ways in which one can get rid of a leased vehicle and which should help to prevent them from incurring any kinds of penalties.
In this article, we look at companies who are now providing a service that matches those who are wishing to get out of a lease agreement to those who are willing to buy into one. So for a fee these companies are in fact acting as online service that is able to match up the right lease seller with the right buyer.
After a deal has been made between the lease seller and the lease buyer the company who has acted as intermediary between the two parties will arrange for the transfer of the lease and title documents. They also help both the buyer and seller to work their way through the processes to this transfer to ensure that everything remains legal and above board.
If you are thinking about using the services of anyone of the many lease-trading companies that are online, you need to factor in certain things. The first being that you will be expected to pay will be their fees for using their services. The initial fee that you are going to be charged for setting up the listing will be between $30 and $130. Plus along with this, some companies may also charge you a further fee of between $95 and $150 to carry out the transfer.
However, what you will often find is that the fees that these companies charge you for using their services will be far less than those you would expect to pay to either a lease company or a car dealership. In a lot of cases where people have chosen to terminate the lease on a vehicle, the dealer or lease company has required any monies that are owed to be paid in full along with a fee for termination of the lease. Whilst there are other dealers and lease companies who instead will require that you actually purchase the vehicle from them.
When a person sells a leased car through a lease-trading company, they list the vehicle with them and then any potential buyers will contact them directly. Once contacted, it is then between the buyer and seller to negotiate the price at which they are both happy with.
Only after a deal has been brokered between the seller and buyer of the lease will the lease-trading company get involved again. After the deal has been done then all matters relating to the processing of the paperwork to transfer the lease and title over to the buyer will be carried out by the lease-trading company.
When you are thinking of selling a car lease by using a lease-trading company you need to be aware that although the majority of dealers, lease companies and car manufacturers are happy for such transactions to occur, there are some who are not. For example, companies such as Nissan and Audi will only allow such transfers to take place as long as the original lessor of the vehicle retains some liability for it once the transfer has occurred.
Monday, March 31, 2008
Turn-In lease
What is a Turn-In lease?
A turn-in lease for fire apparatus is a conventional 5 or 7 year municipal lease purchase with 1 important difference- You can't pay a $1 at the end to own your apparatus after making the payments.
You have 2 choices:
1. Buy the truck at about 30% - 50% of the original cost, or
2. Turn it back to the manufacturer if it meets certain requirements (or pay penalties for the manufacturer to accept the truck as-is)
A Turn-In Lease is perfect for fire departments who:
1. Have a formal replacement program that replaces fire trucks every 5 or 7 years, and
2. Will maintain the trucks within the operating requirements of the manufacturer, and
3. Is 100% sure they will buy the replacement truck from the same manufacturer, or
4. Is not worried about raising or borrowing money if they choose to purchase the truck in 5 or 7 years.
Discipline is required to maximize the effectiveness of a Turn-In Lease. If your department has exact plans and executes its financial and operating plans well, a Turn-In Lease is a great option. Be sure you're OK with the 4 conditions listed above. A Turn-In Lease is not perfect for fire departments who:
1. Is not fully committed to replacing their truck in 5 or 7 years, or
2. Does not feel confident that they can maintain the truck according to the manufacturer requirements, or
3. Is not confident that they will buy a replacement truck from the same manufacturer, or
4. Has concerns that they can not raise the cash to buy the truck or worry about higher interest rates in 5 or 7 years to borrow the purchase price.
If any of the above conditions describe you, a Turn-In Lease is probably not the best choice for you. How does a Turn-In Lease work?
A Turn-In Lease is a conventional fire truck lease purchase that requires 5 or 7 annual payments and a large balloon payment at the end. The contract lets you buy the truck for the balloon payment amount or lets you "turn-in" the fire truck for a new truck if you 1.) buy a new truck from the same manufacturer and 2.) the fire truck is kept according to the required condition specified in the contract terms.
If your fire truck does not meet the requirements, you will have to pay penalties to compensate the manufacturer for the required conditions not met.
It's important to know what the requirements are! Get a copy of the requirements upfront and have them signed as part of your contract to ensure you know the rules.
Does a Turn-In Lease save money?
Yes and No. The complete answer is it depends. If you use your fire truck exactly as the manufacturer requires you and would just finance your truck for the same 5 or 7 years, you'd pay lower payments each year for the budget. Most manufacturers present a "money-saving" comparison using a 5 year Lease Purchase which match how you would finance the fire truck. This isn't always true - see HELPFUL HINT below.
A Turn-In Lease will be more expensive if you finance your fire truck for longer than 5 or 7 years. Here's why:
HELPFUL HINT: The Turn-In Lease payments are based on a 8 1/2 year payment schedule. Choose a 9 or 10 year payment schedule if you like the payment amount of the Turn-In Lease but are turned off by some of the other factors of the Turn-In Lease.
Should I use a Turn-In Lease?
Each department has to make that decision for themselves. This article can not tell you the "right" way - every department is unique! There is no universal right way. I've talked with departments that had great success with Turn-In Leases and I've talked to departments that had a disaster.
The key factor is to do a thorough analysis of the terms and conditions of the Turn-In Lease and decide if its right for you.
If you feel like you may not be fully understanding the exact details of the Turn-In Lease offer, get some help. After all, the devil will be in the details of this complex financial offering.
A turn-in lease for fire apparatus is a conventional 5 or 7 year municipal lease purchase with 1 important difference- You can't pay a $1 at the end to own your apparatus after making the payments.
You have 2 choices:
1. Buy the truck at about 30% - 50% of the original cost, or
2. Turn it back to the manufacturer if it meets certain requirements (or pay penalties for the manufacturer to accept the truck as-is)
A Turn-In Lease is perfect for fire departments who:
1. Have a formal replacement program that replaces fire trucks every 5 or 7 years, and
2. Will maintain the trucks within the operating requirements of the manufacturer, and
3. Is 100% sure they will buy the replacement truck from the same manufacturer, or
4. Is not worried about raising or borrowing money if they choose to purchase the truck in 5 or 7 years.
Discipline is required to maximize the effectiveness of a Turn-In Lease. If your department has exact plans and executes its financial and operating plans well, a Turn-In Lease is a great option. Be sure you're OK with the 4 conditions listed above. A Turn-In Lease is not perfect for fire departments who:
1. Is not fully committed to replacing their truck in 5 or 7 years, or
2. Does not feel confident that they can maintain the truck according to the manufacturer requirements, or
3. Is not confident that they will buy a replacement truck from the same manufacturer, or
4. Has concerns that they can not raise the cash to buy the truck or worry about higher interest rates in 5 or 7 years to borrow the purchase price.
If any of the above conditions describe you, a Turn-In Lease is probably not the best choice for you. How does a Turn-In Lease work?
A Turn-In Lease is a conventional fire truck lease purchase that requires 5 or 7 annual payments and a large balloon payment at the end. The contract lets you buy the truck for the balloon payment amount or lets you "turn-in" the fire truck for a new truck if you 1.) buy a new truck from the same manufacturer and 2.) the fire truck is kept according to the required condition specified in the contract terms.
If your fire truck does not meet the requirements, you will have to pay penalties to compensate the manufacturer for the required conditions not met.
It's important to know what the requirements are! Get a copy of the requirements upfront and have them signed as part of your contract to ensure you know the rules.
Does a Turn-In Lease save money?
Yes and No. The complete answer is it depends. If you use your fire truck exactly as the manufacturer requires you and would just finance your truck for the same 5 or 7 years, you'd pay lower payments each year for the budget. Most manufacturers present a "money-saving" comparison using a 5 year Lease Purchase which match how you would finance the fire truck. This isn't always true - see HELPFUL HINT below.
A Turn-In Lease will be more expensive if you finance your fire truck for longer than 5 or 7 years. Here's why:
HELPFUL HINT: The Turn-In Lease payments are based on a 8 1/2 year payment schedule. Choose a 9 or 10 year payment schedule if you like the payment amount of the Turn-In Lease but are turned off by some of the other factors of the Turn-In Lease.
Should I use a Turn-In Lease?
Each department has to make that decision for themselves. This article can not tell you the "right" way - every department is unique! There is no universal right way. I've talked with departments that had great success with Turn-In Leases and I've talked to departments that had a disaster.
The key factor is to do a thorough analysis of the terms and conditions of the Turn-In Lease and decide if its right for you.
If you feel like you may not be fully understanding the exact details of the Turn-In Lease offer, get some help. After all, the devil will be in the details of this complex financial offering.
Sunday, March 16, 2008
Saving Company Money By Finance And Leasing
A common mistake that many first time business owners make is choosing to buy their businesses equipment with a bank loan. In fact, a lot of business owners don't know that there is any other way to get equipment other than buying it. However, those who are seasoned in business know that equipment leasing is by far the more economical choice for a variety of reasons:
How Leasing & Financing Saves Companies Money:
-Lease payments are tax deductible
-Trade in outdated equipment for brand new equipment
-Always have the most productive equipment
-Tax write offs for full depreciation
-Deferred payment options
When you buy equipment with a bank loan, you're stuck with it while it loses value and productivity. When you want to purchase a new piece of equipment, you've first got to find a buyer for the old equipment, most likely taking a loss on the sale, and then get another loan for the new equipment and begin the cycle again.
In the world of business, where productivity and innovation are critical, it just makes sense to ensure that you have the opportunity to upgrade your equipment quickly, easily, and without added cost. While buying and selling can be a cumbersome and expensive process, leasing allows a company to rapidly grow and innovate.
How to Find Business Equipment For Lease
Finding the best deals on equipment leasing for your particular need is really a numbers game. The more you shop around, the better the deal you're likely to find. There are a few things to consider when shopping equipment leasing companies:
-Payments
-Leasing terms
-Conditions
-Approval time
-Option of payment deferral
Finding the company with the right match of criteria for your particular business needs can mean the difference between struggling each month and having plenty of flexibility to grow your business the way you desire.
Instead of attempting to track down and comparison shop scores of leasing companies, most business owners rely on leasing brokers to find the best deals out there for the type of business equipment they need at terms that are idea. Leasing brokers don't cost YOU any money, their earnings come from the company leasing out the equipment.
Choosing a Broker
Because there may be monetary incentives for an equipment leasing broker to steer you in the direction of a particular equipment leasing company, look for equipment leasing brokers who are willing to provide you with multiple options from which to choose. This allows you to compare the terms and conditions of multiple qualified companies, without having to do the time consuming legwork to get the quotes in the first place.
You'll want to look for an equipment leasing broker that works with a large network of leasing companies. The real value of going with a broker is that they know the industry inside and out and have the contacts to quickly match an equipment leasing company to your needs.
How Leasing & Financing Saves Companies Money:
-Lease payments are tax deductible
-Trade in outdated equipment for brand new equipment
-Always have the most productive equipment
-Tax write offs for full depreciation
-Deferred payment options
When you buy equipment with a bank loan, you're stuck with it while it loses value and productivity. When you want to purchase a new piece of equipment, you've first got to find a buyer for the old equipment, most likely taking a loss on the sale, and then get another loan for the new equipment and begin the cycle again.
In the world of business, where productivity and innovation are critical, it just makes sense to ensure that you have the opportunity to upgrade your equipment quickly, easily, and without added cost. While buying and selling can be a cumbersome and expensive process, leasing allows a company to rapidly grow and innovate.
How to Find Business Equipment For Lease
Finding the best deals on equipment leasing for your particular need is really a numbers game. The more you shop around, the better the deal you're likely to find. There are a few things to consider when shopping equipment leasing companies:
-Payments
-Leasing terms
-Conditions
-Approval time
-Option of payment deferral
Finding the company with the right match of criteria for your particular business needs can mean the difference between struggling each month and having plenty of flexibility to grow your business the way you desire.
Instead of attempting to track down and comparison shop scores of leasing companies, most business owners rely on leasing brokers to find the best deals out there for the type of business equipment they need at terms that are idea. Leasing brokers don't cost YOU any money, their earnings come from the company leasing out the equipment.
Choosing a Broker
Because there may be monetary incentives for an equipment leasing broker to steer you in the direction of a particular equipment leasing company, look for equipment leasing brokers who are willing to provide you with multiple options from which to choose. This allows you to compare the terms and conditions of multiple qualified companies, without having to do the time consuming legwork to get the quotes in the first place.
You'll want to look for an equipment leasing broker that works with a large network of leasing companies. The real value of going with a broker is that they know the industry inside and out and have the contacts to quickly match an equipment leasing company to your needs.
Leasing Equipment For Business Leverage
One of the main reasons people are in business is to gain or maintain financial or economic vitality. The best way to do this very thing is to properly leverage yourself, especially when acquiring new equipment. This is particularly true when making a larger purchase. Examples of larger purchases would include computer equipment, construction equipment, yellow iron, specialty trucks, manufacturing equipment, printing equipment, medical equipment, etc. These sort of things can run $15,000 to $20,000 on the low end of the spectrum and on the higher end can cost hundreds of thousands and even millions depending on what you are buying.
Let's look at an example in the construction field. Your business is booming and you need to get your hands on a new bulldozer. Let's just say this is going to run you about $90,000 or so. You look at a traditional bank loan, it's feasible but they want 25% down. That's a hefty chunk of change at $22,500. Even if you have the cash to the tune of about $30,000 to $35,000, you'd only be left with $7,500 to $12,500. That's not much cash on hand to cover all your other business expenses like payroll, insurance, the cost of running your equipment, etc. How long does it take you to get paid on your invoices? Often times it takes 60, 90, or 120 days to get paid-right? When you consider this, leaving yourself with only $7,500 to $12,500 in working capital can prove to be quite stressful and burdensome. One way to economic vitality is to leverage your business by leasing your business equipment.
Leasing your equipment can be much simpler than your run of the mill bank loan. Often times only a simple application is required (up to $250,000). What do you need at the bank for this type of loan-tax returns, financials, a blanket lien, and sometimes they are finicky about your time in business and previous credit issues? When you lease equipment it can often be done with nothing down or just 1 or 2 payments up front. This will leave you with a lot more working capital so that you can use your cash for items that may not be able to be financed. Leasing also yields better tax advantages and that is why Fortune 500 companies lease their high ticket equipment. Leasing can also be done for those that have low credit scores (under 500 is possible).
Another reason to leverage your business through leasing is that there are no financial covenants required with a lease and there typically are with a loan. Adhering to your financial covenants can be a tedious and time consuming task.
As a business owner, you need to do what you do best-running the show and getting new business. Why bother with chasing down endless piles of paperwork for a bank loan when you can lease the larger ticket items you need to acquire? Why bother depleting your cash reserves when you can lease your equipment and also take advantage of the tax advantages associated with leasing? Opt for economic vitality and leverage your business by leasing your business equipment.
Let's look at an example in the construction field. Your business is booming and you need to get your hands on a new bulldozer. Let's just say this is going to run you about $90,000 or so. You look at a traditional bank loan, it's feasible but they want 25% down. That's a hefty chunk of change at $22,500. Even if you have the cash to the tune of about $30,000 to $35,000, you'd only be left with $7,500 to $12,500. That's not much cash on hand to cover all your other business expenses like payroll, insurance, the cost of running your equipment, etc. How long does it take you to get paid on your invoices? Often times it takes 60, 90, or 120 days to get paid-right? When you consider this, leaving yourself with only $7,500 to $12,500 in working capital can prove to be quite stressful and burdensome. One way to economic vitality is to leverage your business by leasing your business equipment.
Leasing your equipment can be much simpler than your run of the mill bank loan. Often times only a simple application is required (up to $250,000). What do you need at the bank for this type of loan-tax returns, financials, a blanket lien, and sometimes they are finicky about your time in business and previous credit issues? When you lease equipment it can often be done with nothing down or just 1 or 2 payments up front. This will leave you with a lot more working capital so that you can use your cash for items that may not be able to be financed. Leasing also yields better tax advantages and that is why Fortune 500 companies lease their high ticket equipment. Leasing can also be done for those that have low credit scores (under 500 is possible).
Another reason to leverage your business through leasing is that there are no financial covenants required with a lease and there typically are with a loan. Adhering to your financial covenants can be a tedious and time consuming task.
As a business owner, you need to do what you do best-running the show and getting new business. Why bother with chasing down endless piles of paperwork for a bank loan when you can lease the larger ticket items you need to acquire? Why bother depleting your cash reserves when you can lease your equipment and also take advantage of the tax advantages associated with leasing? Opt for economic vitality and leverage your business by leasing your business equipment.
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