New Perspective
New Perspective
A New Perspective On Financing Decisions - Fall 2010

How you finance new trucks is always an important decision. In today’s market, that decision calls for a broader perspective. Your usual financing approach might work – or you may need to refine it to address your changing needs.

Just ask Chuck LeFebvre, vice president and principal of LeFebvre Companies. Based in Elk River, Minnesota, this third-generation family business specializes in transporting precast concrete products such as sewer pipes, wall panels, bridge beams and other dimensional freight throughout the Midwest.

LeFebvre Companies traditionally finances trucks through a retail loan that offers depreciation and ownership. This year, reduced activity among LeFebvre Companies’ clients made strengthening cash flow a higher priority.

In addition, LeFebvre Companies was also looking for financing from a source that understood the seasonality of its business and could provide a simple, convenient process.

When it came time to add six new Kenworth T800 Daycab tractors to its approximately 100-truck fleet, LeFebvre Companies recognized that its traditional retail loan financing wouldn’t offer the improved cash flow it needed. Instead, PACCAR Financial suggested financing the new trucks through a Fair Market Value lease. A Fair Market Value lease offers fixed monthly payments and potential tax advantages. It also offers a variety of lease-end options: A company can buy the vehicle for its fair market value or return the truck to PACCAR Financial in appropriate condition.

The low upfront and monthly payments on the Fair Market Value lease were really attractive,” said LeFebvre. “Financing the trucks through a lease made a big contribution to monthly cash flow.”

To LeFebvre, this was an excellent example of why it is valuable to work with a financing partner who understands his company’s business and can respond to changing requirements. “PACCAR Financial knows the industry so well that it can suggest financing approaches to fit our needs at any given time,” he said.

Some companies avoid leasing because they are concerned about market value and residuals. That didn’t trouble LeFebvre Companies in the least.

“I don’t see any market risk with these new Kenworth T800 Daycabs,” said Chuck LeFebvre. “We’ve never had trouble selling used Kenworth trucks and the T models are especially desirable.”

LeFebvre Companies has always appreciated the ease and convenience of financing through PACCAR Financial.

“Financing trucks with PACCAR Financial is seamless,” said LeFebvre. “Once we specify the trucks at the dealer, moving into funding is automatic. Chad Seth at Rihm Kenworth in St. Paul, Minnesota and Tom Jennings at PACCAR Financial work closely together to streamline financing. The process couldn’t be more convenient.”

Controller Lauri Harrold also appreciates that PACCAR Financial requires less documentation than other lenders, which makes the financing process easier and faster.

These days, how you finance trucks is an important decision with a significant impact. Whether you usually lease or rely on retail loans, now is the ideal time to look at truck financing with a fresh eye – and consider whether a different approach might offer important benefits that help your business succeed in an evolving market.

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