What are Excess Use Hours?
The number of hours the equipment is used beyond the number of hours stated on the Master Lease Schedule. To determine the number of Excess Use Hours, divide the total number of months for the term of the lease by 12. Multiply the answer by the number shown in the "Max hrs" field on the Master Lease Schedule. The resulting answer is the maximum number of hours of use allowed. Any use hours above that number are "excess use hours".
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What is an Excess Use Hours charge?
The fee assessed for Excess Use Hours. The amount of the fee is calculated as follows:
Determine the number of Excess Use Hours (see above). Multiply the number of Excess Use Hours times the amount shown in the "Excess Chrg" field on the Master Lease Schedule. The answer is the Excess Use Hours charge.
Example: This is a 24 month lease, the maximum hours are 300, the excess use charge is $45.00. At maturity the tractor has 610 hours. 24/12=2. 2 x 300=600. 600 hours of use are the maximum allowed. That means there were 10 excess hours used. The excess use charge is $450.00. (10 x 45.00)
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When do Excess Use Hours charges apply?
If the equipment is returned to the dealership at maturity Excess Use charges are assessed.
If the equipment is traded at maturity the details are worked out between the dealer and the customer. A general rule of thumb would be:
If the trade value equals the purchase option no Excess Use charges apply. If the trade value is less than the purchase option Excess Use charges will be due.
If the equipment is purchased at maturity then Excess Use Hours are not applicable.
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