Types of Leases Available
TRAC and Modified TRAC (Terminal Rental Adjustment Clause):
Pay a set monthly payment, then upon lease end, return or purchase it for its TRAC value. If the vehicle exceeds the preset residual value, PFC returns 100% of the excess proceeds. If the value is less, you're responsible for the difference. A Modified TRAC lease limits your liability for any residual short-fall and you may be able to obtain "off-balance sheet" treatment.
Fair Market Value:
Fair Market Value or "walk-away" leases feature a fixed monthly payment and tax advantages can apply. At the end of the lease, purchase the vehicle for its current fair market value, or simply return the truck (return is subject to certain return conditions and mileage restrictions).
Variable Rate Lease (structured as a TRAC or FMV lease):
A Variable Rate lease is less sensitive to interest rate fluctuations than a comparable loan product, thanks in part to accelerated tax benefits. It typically offers a significantly lower initial payment than a comparable fixed-rate lease and payments are adjusted every six months to reflect the market. Customers can "lock in" an interest rate at any time, converting the lease to a fixed-payment finance program.
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