Typical use for guaranteed residual is when working with a TRAC
Lease, Residual Values are established for the future value of the Asset.
They are also subject to usage (mileage) and condition once the Lease firm term
has been completed. Higher Residual Amount typically means lower payments
in the Lease Calculation.
When companies place higher residual values on leases to lower
monthly payments, they are at risk if the operator abuses the “Semi-Truck &
Trailer”, so they will establish a “Minimum” Residual Value for the asset upon
return. If the Lessee agrees to, or if the Finance Company demands a
Residual Value of a certain amount, it must be disclosed in the
Contracts. ASPIRE has two data tags for contracts, Guaranteed and
Unguaranteed Residual Amounts & Percentage.
They can be used when setting up the contract and impact the
Contract Documentation as indicated by the check box in question. If the Lessee is Responsible For
Guaranteed Residual is Checked or Unchecked, $47,897.92 in your example,
it can be directed to the following data tags and be reflected in the contracts
as such.
<LTF>DocGenConContract.Residual Amount</LTF>
<LTF>DocGenConContract.Residual Amount
Guaranteed</LTF>
<LTF>DocGenConContract.Residual Amount
Unguaranteed</LTF>
<LTF>DocGenConContract.Residual Guaranteed</LTF>
<LTF>DocGenConContract.Residual Percent</LTF>
<LTF>DocGenConContract.Residual Percent Guaranteed
%</LTF>
<LTF>DocGenConContract.Residual Percent
Unguaranteed%</LTF>
A TRAC lease, or Terminal Rental Adjustment Clause lease, is a
financing option for commercial vehicles and equipment that allows for lower
monthly payments than a standard loan. TRAC leases are intended for vehicles
that are used for commercial purposes more than half of the time.