EQUIPMENT FINANCING FAQS

A policy number usually starts with CIC-####### and replicates the middle section (7 digits) of the Cat Financial contract number, for example:

• Contract Number: 001-0123456-000 » Policy Number: CIC-0123456

When paying off a contract early, you will have the option to continue coverage through the original contract termination date. However, if you choose not to pay the remaining premium, you are still responsible for any current or past due insurance payments prior to your cancellation date. Login to mycatfinancial.com to get a payoff quote.

Insurance is usually billed in arrears. Meaning, if your payment due date is 7/30/16, this has provided you coverage from 6/30/16 until 7/30/16. If the insurance policy is cancelled on 7/20/16, you will still be responsible for 20 days of coverage. Login to mycatfinancial.com to get a payoff quote.

All cancellation requests must be submitted in writing by completing the Caterpillar Insurance Company Physical Damage Insurance Cancellation Form. Because insurance is highly regulated, the information listed on the insurance cancellation form should match exactly with what is stated on the original policy documents. This includes the insured’s full name, correct address, and the appropriate signature of the insured. For a policy to be cancelled effectively, the date of cancellation and the reason for cancellation are required. The insured must remit all applicable supporting documentation as detailed below:

1. Proof of trade documents if the unit was traded in or sold to the dealership
   • Dealer invoice or purchase receipt
2. Proof of the sale between the insured and the new owner if the unit was sold
   • Notarized Bill of Sale including date of sale, model, serial number, amount of purchase, and signatures for both parties
3. Certificate of Insurance if alternate coverage is obtained through an outside insurance agency
   • Certificate of Insurance with equipment model and serial number, effective date of coverage, showing Caterpillar Financial Services Corporation as lienholder
4. Documents if the Policyholder is deceased
   • Signature of the Power of Attorney/Executor of the Estate on the cancellation form; attach death certificate and Power of Attorney or Executor of the Estate documentation
5. “Total Loss” of equipment
   • Insurance cancellation form must be completed with the specified date of the loss

A principal reduction refers to the reduction of either the term or partially paying down the principal amount on loans and finance leases.

No, processing of principal reduction requests are performed as a courtesy.

If you qualify, a minimum of three times the next payment amount due must be received. The excess amount must be clearly specified as “principal reduction.” When your payment has been received, the amount equivalent to one payment will be applied to the next due payment that is open and the excess funds will be applied to reduce the principal. Additional funds received that do not meet the criteria described above will be applied to future payments.

You must be in good standing with no default on any contracts to qualify.

If you qualify for a principal reduction, you can make up to two principal reduction payments per year.

Yes, a principal reduction payment can be applied to finance leases and loans. Taxes must be taken into consideration regarding finance leases.

Yes, either method can be utilized, however if not specified on your payment, the funds will be applied to reduce the term of the loan.

Three times the next payment amount due refers to three times the base payment amount not including monthly billables such as taxes or insurance, etc.

• Monthly payment: $1,000
• Three times next payment: $3,000

If funds are specified a principal reduction the monthly payment due will be applied first and excess will be applied towards principal.

• Applied to open payment due: $1,000
• Applied to principal: $2,000

Any amount less than three times the payment will be applied to payments that are currently invoiced with excess being applied towards future payments.

• Applied to open payment due: $1,000
• Applied to future payments that are not yet invoiced: $1,000

Any payment method in which you can specify “principal reduction” is recommended. If paying via check or wires, please specify on the memo line. If making a payment online please select the appropriate “principal reduction” drop down option, do not select “principal balance.” For phone payments, please inform your customer service representative.

Your balance is not impacted until the principal reduction payment process is completed by a Cat Financial representative, at which time your account balance will change to reflect the new balance.

Once a principal reduction has been completed, a new amortization schedule will be provided to the customer via mail and invoices will remain viewable online. Due to modification of the contract, the amortization schedule and automatic buyouts will no longer be available online and require manual calculation.

Our current accounting system has certain limitations on processing principal reduction payments. We understand there may be a need for a principal reduction which is why we have the current process in place.

The language for finance leases and loans for United States contracts can be found in one of three sections depending on when your contract began. Section 4, 5 or 22 will provide details on reducing your principal and is most often entitled “Buyer’s Promise to Pay"; "Terms of Payment” or “Buyer’s Unconditional Payment and Performance Obligations.”

If a customer sends in $6,000 or $10,000 for a principal reduction you can see the impact on the term or payment, dependent on how the customer chooses to apply funds.