Can you have trade equity in a lease? Well, not technically, since the lessee doesn't actually own the truck, but we sure seem to give a lot of it away!
CLG makes a regular practice of giving most or all of the equity we realize in off-lease sales back to our customers, in the form of credits against new leases. We do this for a couple of reasons.
First, if our customers have a stake in the condition of the vehicles they return to us, they end up being a little more careful. In the long run, this could lead to us getting back trucks that are in better condition. We hardly ever actually charge customers for damage, since we're well aware of the usage they're seeing, so it's a little bit of an insurance policy on our end.
Second, our customer relationships are usually pretty long-term. Once we're in business together, we stay in business together. You treat people well and they'll treat you well iin return, which is reflected in the cheaper pricing our customers get through the return credit. And, again, we tend to get stuff back in better condition.
It's just like your grandmother told you— sharing really is the best policy.