Accounts: Termination - Lease
Used to calculate and payoff leases. This screen is designed to terminate a lease within ALMSys to a zero asset (principal) balance. Use the Termination Estimator to properly calculate and quote terminations to your customers.
Layout / How To
The screen is presented in multiple steps. Please review each step to ensure accurate terminations.
Step 1: Select the Type of Payoff
Payoff choices are:
1. Completed Lease. This is a lease that has gone to normal lease end termination.
2. Early Payoff. This is used when a vehicle is being turned in before normal lease end termination.
3. Repossession. This is used when a vehicle is repossessed, typically due to lack of payment or failure to provide adequate insurance.
Upon termination, the security deposit is either kept (in the event of repossession) or returned to the lessee (possibly via the lessor). This distribution is indicated in the Security Deposit area. The security deposit choices do not affect the calculations required to bring the lease to a zero principal balance.
Step 2: Determine the Payoff Amounts and Post Date
This section is where you determine the payoff amounts and posting date for the payoff. These amounts are filled in for you based on the last billing and balance calculations. What is presented will bring the lease to a zero principal balance. However, you may override these amounts as needed.
Repossessions do not follow any of the rules. Payoffs for repossessions are usually in two parts: 1) For the initial auction or sale of the vehicle, and 2) The resulting write-off of the remainder of the unpaid asset. ALMSys allows multiple payoffs to occur. In fact, you may post as many payoffs as necessary to get to a zero asset balance. For the initial sale of the vehicle, fill in the amount of the sale in the Principal Amount field and set the Post Date to the date on which the repossession occurred. You may also repossess the vehicle for a zero dollar amount. This action will terminate the lease, but leave the asset as is.
For subsequent payoffs for a repossession, you may post interest-only payments. A check box will appear for this situation and you must check it in order to post an interest-only payoff.
If you are quoting a payoff to a dealer, you may use the Payoff Fax button to iniitate this process. A panel will open where you may specify to whome the fax is going. If a message appears in red, then you should do what that message states and then return to the payoff screen. Click the Payoff Fax Sheet button to create the report. (The "Good Through" date is always 10 days from today.)
Step 3: Terminate Depreciation
To terminate depreciation, enter the last day of the month for which you wish to depreciate.
Step 4: Terminate Leveraged Financing
To terminate leveraged financing, enter the date on which the financing was (or is to be) paid off.
Step 5: Optional Other Termination Actions
This section allows you to select the termination decision for future reference.
Last Step: Post the Payoff
The last section on this screen is where you would click to post your payoff choice. Clicking this button will perform all of the terminations that you indicated on this screen.
If you repossessed the vehicle, a report option for "Repossession Summary Report" will appear at the top of the screen. This report is helpful if you plan litigation against the lessee.