As you research all of the various leasing programs, you will likely run into two terms that have a big impact on your decision-making: Closed-ended leases versus open-ended leases. One of the main differentiators between leases is whether you enter into a close-ended or open-ended lease. At Toyota Industries Commercial Finance, we only offer close-ended leases because they are the most beneficial to the end customer for both liability and Return on Investment (ROI). Please allow me to assist you in navigating the difference:

Understanding a Close End Lease:

A basic understanding of close end leases means that at the maturity of the lease, it is closed to the lessee. More thoroughly, when engaged in a close-ended lease, the lessee will make their scheduled monthly payments throughout the agreed upon term of the lease and at the end of the lease, the lessee has no contingent liability of the lease end residual. Additionally, the leasing company is under no obligation to sell it to the customer however, the customer may be provided with an option to purchase the equipment. A close end lease provides the lessees with the option to simply return the equipment and move onto their next new lease, which means they will receive the latest equipment technology. On a closed end lease, a customer is required to maintain the equipment in a safe operating condition with no liability for the residuals.

Understanding an Open End Lease:

When a customer enters into an open end lease, they use the forklift for the full length of the lease term, and after the lease expires, the customer is liable for the remaining residual balance of the equipment.   No matter the decision, the customer will still be responsible for paying the remaining residual value of the forklift.

Toyota Industries Commercial Finance is happy to provide you any additional information you need. When financing a forklift or forklift fleet, always remember to ask a lot of questions and obtain as much information as possible.