COMPARISON OF FINANCIAL PRODUCTS
| Installment Sale Contact | Finance Lease or Flex Lease | Tax Lease-Cat Value Option or Window Lease | Tax Lease-Long-Term Rental | TRAC Lease | |
|---|---|---|---|---|---|
| Ownership | Immediate | Option to return or purchase at lease end; Flex Lease provides the option to return early at the predetermined date | Option to return or purchase at lease end; Window Lease provides the option to purchase early at the predetermined date | Option to return or purchase at lease end | Option to return or purchase at lease end |
| Equity Buildup | Faster | Slower | None | None | None |
| Tax Depreciation | Customer | Customer | Cat Financial | Cat Financial | Cat Financial |
| Payment | Higher | Lower | Lowest | Lowest | Lowest |
| Purchase Option | N/A | Bargain | Predetermined fair market value | fair market value | Predetermined fair market value |
| Contract Flexibility | Yes | Yes | Less | Less | Less |
| Early Payoff Restrictions | No | No | Some | Some | Some |
| Personal Property Tax | Customer pays (Varies by state) | Customer pays (Varies by state) | Cat Financial pays, then invoices customer | Cat Financial pays, then invoices customer | Cat Financial pays, then invoices customer |
| Additional Information | Customer owns and depreciates Immediate equity through down payment or trade-in Quickest equity buildup through repayment | Leases has ownership Bargain purchase option reduces payment Lessee may take depreciation Equity buildup is slower Characteristics of an ISC with the lower payments of a lease | Use or possible optional ownership Lessee treats unit as rental No equity buildup | Use or possible optional ownership at Fair Market Value a lease-end Lessee treats unit as rental No equity buildup | For over-the -road motor vehicles and trailers only All U.S. Taxpayers using "on-highway trucks, tractors and trailers qualify Lease payments are fully deductible for tax purposes Improves cash flow |