Being in the equipment financing business, we get a ton of interesting phone calls. And one we got last week qualifies as interesting, and also because I’ve been blogging a lot about automobile leasing, fits perfectly into a blog post.
To first set the stage, I was recently discussing vehicle leasing and financing and similar, and what type of vehicles an equipment financing company finances. And “finances” is the optimal word when it comes to vehicles. These days, companies like mine sometimes shy away from outright leasing vehicles, preferring to finance them instead. Why is that? Because in a typical lease, the leasing company is listed as the registered owner. In a vehicle financing deal, the company that is purchasing the vehicle is listed as the registered owner. This is a big difference.
First of all, most companies actually want the vehicle in the company name. Taxes, assets, etc. It just works better for most companies that way. But the second reason we’d rather finance than lease vehicles is the liability factor, which brings me to the recent phone call.
We got a call from a sheriff in Virginia who was looking to collect on a parking ticket. Well, we’re not in Virginia, so at first, we were a little puzzled. Then it becomes clear that the parking violation was made by a client of ours, in a vehicle leased to them. Technically, we’re the “registered owners” of said vehicle. So when our client (mistakenly, of course) forgot to pay the parking ticket, we got the call. The happy end is things got straightened out, our client paid the ticket, and all was well. But it illustrates why an equipment financing company would rather not get involved in leasing vehicles (at least common leases. We do engage in TRAC leases [terminal rental adjustment clause], but discussing that is an entirely different post, or series even).
Hope you are all enjoying your summer.