First Investment Bank AD Stock

PACCAR Financial Corp. provides financing and leasing of PACCAR-manufactured trucks and other transportation equipment sold through PACCAR’s independent dealer network in the United States. The company also finances dealer inventories of new and used transportation equipment. The company operates as a subsidiary of PACCAR Financial Services Corporation.

The company’s PacLease division franchises PACCAR dealerships to engage in full-service and finance leasing. In selected markets, PacLease directly engages in full-service leasing with its customers through company-owned stores and on a limited basis through PACCAR dealerships.

The company provides financing to customers and dealers for new Kenworth and Peterbilt trucks, used trucks, truck trailers, and allied equipment. It offers similar financing programs for PACCAR products through other wholly-owned finance companies in Mexico, Canada, Australia, the United Kingdom, and Continental Europe, as well as conducts its full-service leasing operations through wholly-owned subsidiaries in Canada, Mexico, and Germany.

Products

Retail Contracts and Loans

The company purchases contracts from dealers and receives assignments of the contracts and a first lien security interest in the vehicles financed (Retail Contracts). Certain Retail Contracts with third party leasing companies might also include an assignment to the company of the related lease and rental payments due. Retail Contracts purchased by the company have fixed or floating interest rates.

The company also makes loans to the end users of the vehicles financed that are secured by a first lien security interest in the vehicles (Loans). Its loans have fixed or floating interest rates.

Direct Financing Leases

The company offers direct financing lease contracts where it is treated as the owner of the equipment for tax purposes and generally retains the tax depreciation (Direct Financing Leases). The lessee is responsible for the payment of property and sales taxes, licenses, maintenance and other operating costs. The lessee is obligated to maintain the equipment and to insure the equipment against casualty and liability losses.

Operating Leases

The company offers operating lease contracts (Operating Leases) where it owns the equipment. The lessee is responsible for the payment of property and sales taxes, licenses, maintenance and other operating items. The lessee is obligated to maintain the equipment and to insure the equipment against casualty and liability losses. At the end of the operating lease term, the lessee has the option to return the equipment to the company or purchase the equipment at its fair market value.

Insurance

The company’s Paclease business offers physical damage and liability insurance on new and used trucks and trailers to its full-service lease customers. The customer retains premium and loss exposure for the policies that are issued through an unrelated regulated insurance carrier.

The company offers the following products to PACCAR dealers and PacLease franchisees:

Master Notes

Master note contracts (Master Notes) are offered to select dealers for new and used trucks. Retail installment contracts originated by the dealer for new or used trucks which meet the company’s requirement as to form, terms, and creditworthiness for Retail Contracts are pledged to the company as collateral for direct, full recourse loans by the company to the dealer. Master Notes have fixed or floating interest rates.

Wholesale Contracts

The company provides wholesale financing for new and used truck and trailer inventories for dealers (Wholesale Contracts). Wholesale Contracts are secured by the inventories financed. The amount of credit extended by the company for each truck is generally limited to the invoice price of new equipment and to the wholesale value of used equipment. Interest charged under Wholesale Contracts is based upon floating interest rates.

Dealer Loans

The company makes secured loans to selected Peterbilt and Kenworth dealers (Dealer Loans). The purpose of these loans includes the financing of real estate, fixed assets, working capital, and dealership acquisitions. Dealer Loans have fixed or floating interest rates.

Full-Service Leasing

The company also conducts full-service leasing operations under the PacLease trade name. Selected dealers are franchised to provide full-service leasing, which includes the equipment, maintenance, parts, taxes, and licenses all in a combined contract with the customer. It provides the franchisees with equipment financing and managerial support. The company also operates full-service lease outlets in selected markets on its own behalf.

Insurance

The company provides insurance coverage, through an unrelated regulated insurance carrier, on new trucks, used trucks, and trailer inventory to dealers having wholesale contracts with the company.

History

PACCAR Financial Corp. was founded in 1961.