We agree with AMI, and we vacate the judgment. A TRAC lease lasts for an indefinite period of time and is very similar to a financed sale. Under the TRAC lease, Cozy Harbor agreed to pay AMI a monthly depreciation charge until the original value of the vehicles was fully depreciated. After that, Cozy Harbor would pay only a nominal monthly service charge. Cozy Harbor is obligated to pay all costs associated with owning and operating the vehicles.
Customer acknowledges that it is the intent of the parties that . . .
This clause requires Cozy Harbor to return the vehicles to AMI which would then sell them at wholesale. The proceeds would be applied to the remaining depreciable value, and any excess would be paid to Cozy Harbor. If the proceeds fell short of the remaining depreciable value, Cozy Harbor would be required to pay AMI the difference. The lease term commenced on January 1, 1996. Several days later Cozy Harbor took delivery of the trucks and began paying on the lease.