Net leases are among the cheapest leases, at least in terms of monthly payments. When someone signs a net lease, he is not just leasing the rail car, he is also leasing all the responsibilities and costs associated with the rail car. So, while the monthly payments may be low, it is also possible to end up with a large repair bill. For those who can repair and maintain rail cars themselves, or have access to someone who can, this is a legitimate option. The same idea applies to insurance and taxes. If a business owner has access to cheap insurance and an accountant or is highly familiar with tax law, then money can be saved by signing a net lease.
Serviced leases come in degrees, from full service leases to partial service leases. A full service lease includes everything--taxes, maintenance, insurance, repairs and any other associated costs. These tend to be substantially more expensive than net leases, but they also fix your costs. A net lease may theoretically cost $10,000 a month, but then cost $20,000 in the sixth month when an accident happens or scheduled maintenance comes up.
A serviced lease, on the other hand, may cost $12,000 a month, but this price is guaranteed not to rise. These leases may end up costing the lessee more, though, as there is one more middleman--the owner--and the repairs that are covered by the extra fee may never be necessary.
On the more expensive end of the spectrum, are lease-to-own agreements, or purchase options. These are rail car lease agreements where the lessee pays a higher monthly fee than he or she usually would in exchange for the right to buy the rail car at the lease's conclusion. The price is generally set at the lease's inception, either at a fixed rate or at the fair market value of the rail car at the lease's conclusion.
The advantage of these leases is that it is possible to take steps toward owning a rail car without the large down payment or collateral risk. However, if a lessee pays the extra fees for the entire lease term, then does not have the funds to buy the rail car at its conclusion, then she will have lost a great deal of money as she spent extra money for the rights to an option never exercised. This is important to bear in mind when investigating a lease to own deal.
