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Net vs. Full-Service Lease


For most fleet managers, the bulk of their railcars are leased; it’s a great alternative to purchasing each railcar.  It’s important to keep in mind that there are two different kinds of leases (Full-Service and Net) that cater to different needs.  However, choosing the best lease for your fleet isn’t so black and white.


At AllTranstek, we want to help you pick the lease that’s right for you.  If you have the means to perform day-to-day maintenance on your fleet, you might think about a Net lease.  If you don’t, perhaps a Full-Service lease is right for you.


The Lessee: Lower monthly costs, higher return costs
• Pays for maintenance and repair expenses
• Pays for special interior coatings
• Pays property taxes and insurance
• Pays railroad for “running repairs” as well as railroad damage (Rule 95)
• Covers manufacturer warranty itemsTakes care of AAR and FRA mandatory repairs

*Lessee maintains car from one end to the other, requiring an experienced rail management team to ensure profitable operation.


The Lessor:
• Typically discounts the monthly rental rate due to the lessee handling maintenance and repair expenses.


The Lessee: Higher monthly costs, lower return costs
• Pays for all parts of the car that product touches. For example: valves, coatings, and gates and hatch covers

• Covers damage to cars while handling, loading, and unloading


The Lessor:
• Pays for AAR Interchange Repairs. “Running Repairs” maintenance of cars, railroad damage (Rule 95)
• Will usually reimburse for time cars are “out of service” (unless lessee is responsible for items as listed in the lease)
• Covers property taxes and insurance
• Covers manufacturer warranty items
• Takes care of AAR and FRA mandatory repairs and upgrades

How can we help your business move forward?