Business and Personal Finance Dictionary

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• AUTO RENTAL FLEET
  
  Auto rental companies finance their fleets under lease transactions. The securitization borrows to finance the purchase of cars from major manufacturers, and the rental company makes monthly payments under leases. The monthly payments are sized to cover interest and depreciation on the vehicles. The majority of the vehicles are purchased subject to repurchase agreements with the manufacturers, under which the manufacturers agree to repurchase the automobiles at future dates according to a predetermined pricing schedule. The bonds issued in these securitizations are secured by the lease payments and the proceeds of disposition of the automobiles, whether under manufacturer repurchase agreements or through other sales. Auto Rental Fleet sucurtizations typically have scheduled terms of three to seven years, and are repaid during the last twelve months.
  
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