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Funeral Vehicle Financing


Types of Vehicle Financing

Straight Purchase:

This method of acquiring a vehicle requires the buyer to pay for the vehicle outright at delivery. These funds typically come from a loan at a local bank or from the buyer’s savings.

Also referred to as a “walk-away lease” or “traditional lease”.

  • Typical term is 60 months (but can be different).
  • At the end of a lease term, the customer will return the vehicle to the dealer in good condition and has no further obligation (vehicle must be within mileage and condition limits set forth in agreement).
  • Customer is only paying for a “portion” of the vehicle; at lease end, the vehicle still has “life” (value) remaining and can be sold again. Therefore, a customer can enjoy lower payments during the term because he/she is not paying for 100% of the vehicle.
  • 100% of the lease payments can be expensed – written off as a monthly operational expense on your taxes.
  • Oftentimes, lease rates are a little lower than a straight purchase rate because under leasing laws, the bank can depreciate the vehicle as an asset, thereby providing the customer with a more attractive lease rate.
  • Customer cannot depreciate the vehicle since it is not an asset on the customer’s books.
  • Ideally, this lease structure works well when a customer does not want to keep the vehicle for an extended period of time (taking advantage of current body styles, updating equipment as necessary, and rapidly responding to industry changes).

Also referred to as a “dollar buyout” lease

  • Typical term is 60 months (but can be different)
  • At the end of a lease term, the customer owns the vehicle 100% - Customer receives title to the vehicle
  • This is virtually identical to financing the vehicle through a local bank
  • Customer is paying for the full value of the vehicle over the term, so the payments are higher than a straight lease (but customer will own the vehicle at the end)
  • Customer is able to depreciate the vehicle as an asset on the company’s books
  • Monthly payments cannot be expensed because it is not a “traditional lease”
  • Typically, these rates are a little higher than a straight lease because the bank is unable to depreciate the vehicle
  • Ideally, this works well when a customer wants to keep the vehicle for many years

Trac Purchase

  • Typical term is 60 months (but can be different)
  • At the end of the lease term, the customer owns the car 100%, but also guarantees to pay a pre-determined residual amount
  • This type of lease is appropriate when the customer wants lower monthly payments than a straight purchase, but also wants to own the vehicle at lease end
  • The customer must fully understand that the agreed upon residual amount is his / her responsibility to pay to the dealer at lease end. The “final payment” is not optional and is non-negotiable
  • The customer can dictate the monthly payment amount by how much he / she agrees to pay at lease end. Thus, the higher the “final payment”, the lower the monthly payment during the lease term
  • BE CAUTIOUS with some finance companies offering you “too-good-to-be-true” lease payments…CHECK YOUR PAPERWORK CAREFULLY…there is probably a guaranteed payment at the end of the lease term for which you may be unaware
  • Trac leases are useful tools when the customer is well informed…some unscrupulous dealers have used this type of lease to mislead funeral home owners into thinking they are getting a better deal (trying to beat another dealer’s pricing)… REVIEW all documents prior to signing!

  • Leasing conserves your working capital. Rather than spending all the money in your checking or savings account (or credit line) to purchase equipment, lease it instead. When you lease equipment, you only make monthly payments. Most leasing programs usually only require two payments or a minimal down payment in advance. This will conserve working capital to handle short-term obligations like unexpected expenses or unpredictable business cycles
  • Leasing is Purchasing Power. Leasing allows YOU to acquire more and/or better quality equipment with existing warranties.
  • Leasing provides Flexibility. Leasing can provide flexibility to add and upgrade your equipment so YOU can rapidly respond to industry changes. Competitive rates, lease terms up to five (5) years, and monthly payments substantially lower than traditional financing. Some leasing programs can offer deferred, seasonal, skip, and step payment options.
  • Leasing provides a variety of tax breaks. Unlike loan payments, lease payments may be fully deductible as a monthly operational expense.
  • Leasing is quick & easy to apply for. Unlike loan applications that can take weeks to process and require volumes of paperwork, applying for a lease is a simple, one-page application. Approval will be granted within 24-48 hours, lease documents can be sent to YOU by email or overnight delivery, and funding can occur within one business day following receipt of all requested information.

HOLD ONTO YOUR CA$H!!!

As a business owner, your money is prey to rising interest rates and equipment depreciation. LEASING is the solution for acquiring all large business items. Unlike purchasing, a lease has so many benefits that can help the profitability of a business.


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Funeral Vehicle Financing

Funeral Vehicle Credit Application

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