The California Air Resources Board (ARB) announced March 6 that it is offering a lease-to-own financing opportunity that encourages small business owners to replace their older diesel trucks with clean new equipment. The objective of the program is to encourage early compliance with CARB’s on-road diesel vehicle and tractor-trailer greenhouse gas regulations.
The ARB financial option combines the tax advantages of leasing while retaining the option to purchase the leased equipment in the future. This is typically an attractive alternative for smaller owner-operators, who may not meet today’s stringent borrowing standards to comply with diesel truck and bus regulations and help meet California’s clean-air and health goals.
“This is a program that benefits small fleets and owner-operators,” said ARB Chairman Mary D. Nichols. “It provides them with an additional way to pay for a cleaner truck, even if their credit isn’t stellar.”
The ARB diesel compliance rule requires that beginning Jan. 1, 2012, heavier trucks must be retrofitted with PM filters and by Jan. 1, 2023, nearly all trucks and buses will need to have 2010 model year engines or equivalent. The regulation applies to almost all privately and federally owned diesel-fueled trucks and buses with a gross vehicle weight rating greater than 14,000 lbs. The rule is separate from ARB’s emissions rules affecting automakers that were announced Jan. 31, 2012.
“Making upgrades easier to obtain and more convenient is essential to successfully implementing California’s clean air standards,” said State Treasurer Bill Lockyer, chair of the California Pollution Control Financing Authority. “This program does that and gives truckers more choice in financing their upgrades.”
Prior to adding this option, there have already been 1,079 loans issued to purchase diesel equipment for a total of $66.3 million in financing by participating lenders to get cleaner trucks on the road.
Diesel exhaust contains a variety of harmful gases and more than 40 other known cancer-causing compounds. California identified diesel particulate matter as a toxic air contaminant based on its potential to cause cancer, premature death and other health problems. ARB’s truck and bus regulation is designed to substantially reduce these emissions.
For eligibility determination and an updated list of participating financial institutions go to www.treasurer.ca.gov/cpcfa/calcap/contributor/lenders.pdf.