LEASING SERVICES

Open End Lease

Our signature financing product combines the flexibility of ownership with the cash flow advantages you get with leasing. The Open End lease (or Trac Lease as it’s often called) has become a popular choice for many customers for a number of reasons.

An Open End Lease:

• Frees up capital for more vital capital expenditures.
• Allows you, in most cases, to show the minimum lease payments within the notes of the financial statement and off the balance sheet.
• Gives many customers an opportunity to expense the monthly lease payments.
• Can eliminate up-front tax fees in most states.
• Allows you to match depreciation with actual driving patterns and market conditions and lets you adjust depreciation if trends change.
• Eliminates surprises on the back end. You are responsible for principal balance instead of market value.
• Gives you a menu of lease structures to optimize cash flow.

The Right Rate For You

In the effort to always deliver the best leasing service option for our clients, Union Leasing provides both floating and fixed rate options for Open End leases.

Floating Rate

Union Leasing currently employs two indices: Libor and Prime. The interest portion of your rate adjusts to reflect any change in the base rate. Libor rate adjusts monthly; the Prime adjusts for the next billing cycle after every rate change.

Fixed Rate

Fixed rates are based on the Prime rate established at the inception of the lease and remain fixed throughout the term. As with the floating rate, both the Level and Step payment options are available. The Level payment is based on an amortization table that establishes the depreciation and interest charge for that month. Each month your principal reduction increases while your interest charge decreases, resulting in fixed level payment.

A Comparison: CLOSED END vs. OPEN END

Open End Lease

Generally appropriate for:

• Corporate fleets of more than 25 vehicles
• Lessee assumes more risk for depreciation, but generally pays less per month and enjoys more flexibility.

Advantages:

• Frees up capital for more vital capital expenditures.
• More flexibility if your needs change.
• Takes advantage of a positive reseller market.

Closed End Lease

Generally appropriate for:

• Smaller fleets and government customers
• Lessor assumes more risk for depreciation, but charges more on a monthly basis to assume risk.

Advantages:

• Minimizes risk
• "Walk-away” convenience
• Depreciation risk is assumed by Union Leasing