current VEMA Guide - Vehicle and Equipment Management Agency ...

5
Rates and Invoices
52
LEASE SETTLEMENTS
When your lease expires, we ask you to return the vehicle to VEMA where we dispose
of it and settle the lease with your organization. In most cases, VEMA disposes of the
vehicle at public auction.
If VEMA decides to auction the vehicle, we will prepare it for auction. (See pages 8
and 58 for details on Disposal of off-lease vehicles.) We’ll settle the lease when VEMA
receives the sale proceeds from the auctioneer. If the actual resale amount obtained
from auction (actual residual value) is greater than the amount indicated on your
lease agreement (projected residual value), VEMA owes you the difference. However,
if the actual residual value is lower than the projected value,
you owe VEMA the difference. Maintaining and keeping
your vehicles in good condition will help bring higher resale
values and positively impact your lease settlements.
VEMA will deduct auction preparation charges from any
proceeds, or issue a Direct Invoice in a situation where the actual
residual value was lower than the expected residual value.
Early Lease Termination
It is possible to terminate a lease agreement if you decide you don’t want to continue
with a lease before the end of the term. A penalty will apply to all early lease
terminations. The amount of the penalty varies depending on each lease, term and
vehicle. Call VEMA for more information.
VEMA also offers a communication service to see if there is another organization
within our customer base that would be interested in assuming your lease. We will
issue a communication to all our customers listing the details of your vehicle. In
addition, our Fleet Manager researches possible alternative placements. There is a
fee for this service whether or not the vehicle is placed. Call VEMA for details.
BUDGETING FOR NEXT YEAR
Note
See Section 7
VEMA 101 for
more information
on residual values.
When its time to budget for next year’s transportation expenses, keep the following
costs in mind:
• Rent for leased and long-term rental vehicles
• Variable rates for leased and long-term rental vehicles multiplied by projected distance
• Fuel
• Insurance
• Projected short-term rental use and costs
• Incidental costs for irregular items such as accidents