Thread: Lease of apparatus???
08-21-2000, 09:57 AM #1no_name_FFFirehouse.com Guest
Lease of apparatus???
I am trying to examine the costs of leasing in an effort to convince our town's government that 2000 is not the time to stop purchasing new apparatus.
Has anyone leased apparatus. What is the cost of lease per year, number of years, downpayment and total cost of apparatus if purchased (instead of lease)?
Thanks for your help.
The above is MY OPINION only and not that of anyone else. I am not representing any organization in making a post here!!!!
08-21-2000, 11:15 AM #2colfiremanFirehouse.com Guest
Hi there can't give you any numbers but our city has been leasing trucks(fire and public works) for about 5 years now.we actually purchased our last engine-$424,000 and the city turned around and sold it to a leasing co.apparently the money is invested at a higher % than borrowing so the city ends up a little ahead.whatever they do i don't really care as long as we get out trucks!!!!!
08-23-2000, 12:19 PM #3LHS'Firehouse.com Guest
Simply take the amount multiply by 1.6 then divide by the number of years to determine the payment. $150,000 x 1.6 =$240,000 divided by 12 years = $20,000 a year or $1666 a year.
08-29-2000, 12:19 AM #4grc063Firehouse.com Guest
You might want to check out the American LaFrance web site. They have what is called a vantage lease program, where you have the option, say after 5 years, of either purchasing the unit for $1.00; walk away from it or trade the unit in for a new one. During the Vantage lease the unit(s) are covered by a full warranty. Since they are owned by Freightliner, who in turn is owned by Mercedes Benz, ALF can offer some extremely attractive rates & plans.
09-13-2000, 11:24 AM #5Badge174Firehouse.com Guest
We are semi-leasing our Pierce Dash 2000 through BancOne Leasing.
Pierce and Banc One Leasing are together on this program. Banc-One does a low interest loan-lease they make a payout to Pierce when the frame rails are cut, the full chassis amount - saved about $9,000 there and upon deliver you have the option of a "buy-down" lowering the over rent payment.
We perfered an annual payment using the profits from our firemans carnival. But BancOne will work with you on the payment schedule. At the end of the lease period (10years in our case) you have a $1 buyout to own the rig.
I figured over the 10 years by combining a PAEMA low interest loan plus the Banc One loan-lease and receiving the Chassis discount we saved about $25,000 to $29,000
over a conventional loan with monthly payments.
I have a contact name at Banc One that could help, Drop an email if you want it.
09-13-2000, 12:41 PM #6LHS'Firehouse.com Guest
////Banc-One does a low interest loan-lease they make a payout to Pierce when the frame rails are cut, the full chassis amount - saved about $9,000 there and upon deliver you have the option of a "buy-down" lowering the over rent payment. ///
Are you saying the loan started at the time of contract signing? in other words you make a first payment 12 months after ordering or 3 to 6 months after the rig arrived?
///receiving the Chassis discount we saved about $25,000 to $29,000
over a conventional loan with monthly payments.
in other words you made a pre-payment for the chassis?
If so how would you be able to reject the unit if you didn't like it or it was over weight or not to spec if you alreafy own the chassis?
09-13-2000, 07:29 PM #7Chief Sanborn CFRFirehouse.com Guest
We started lease/purchasing our trucks about ten years ago. We did this because we had a hard time getting our town to set aside enough money to purchase outright, and the only other option was to issue a bond which required a 2/3 majority of the people voting. We would sometimes miss by half a dozen votes. We lease/purchase through E-One.
In 1990 we leased a $120,000 pumper for 8 years.We put $10,000 up front and paid $17,000 for 8 years for a total of $146,000.
In 1999 we leased a $230,000 pumper for 10 years at $10,000 down and $29,000 a year for a total of $300,000. We certainly could do better interest-wise by getting the trucks by saving or bonding, but then again, we might not have gotten the trucks. We try to use a 10 year replacement program where the truck is first due for 10 years, then stepped down to a less strenuous postion. If we went the traditional funding way and were turned down, it would tend to mess up our replacment program. If you can get your apparatus by convincing those holding the purse strings to save for them, thats the wasy to go.
09-14-2000, 12:14 PM #8S. CookFirehouse.com Guest
The successful bidder on our 10 apparatus submitted 12 different leasing options with the bid.
Our payments do not start until 1 year after the apparatus are delivered.
Also included is a non-appropriations clause. I don't know if every lease company out there has this, but essentially if the county decides they no longer want one (or more) of the trucks and do not appropriate the funds for the lease, they go back to the mfg without any penalty.
The option of prepayment into an interst earning account was also included. Basically if we wanted to prepay any amount, they would put it in an account that collected interest. When the first payment was due they would draw it out put it towards the payment and cut us the check for the interest or put it towards the principle.
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