From residual value methodology to Section 179 structuring, TD Equipment Finance’s Anthony Sasso offers a frank look at how top-tier fleets are surviving today’s trucking headwinds — and who will be ready when conditions improve.
The trucking sector is caught between caution and consequence. Freight rates remain soft, maintenance costs are climbing on aging fleets, and operators are asking whether extending their trade cycles is sound strategy or simply deferred pain. Anthony Sasso, president of TD Equipment Finance, has a clear view of the math — and of which operators are getting it right. In this conversation with Monitor Editor in Chief Rita Garwood, he shares what TD is seeing across the credit spectrum, how the lender is adjusting its underwriting in a volatile residual environment, and what it will take to move the industry from preservation mode into genuine reinvestment.
Rita Garwood: Operators are extending trade cycles to preserve liquidity. From a lessor’s perspective, how is this shift impacting maintenance-to-debt ratios, and at what point does “preserving flexibility” turn into a detrimental cost of operation?
Anthony Sasso: Extending trade cycles can be an effective way to preserve near-term liquidity, but it comes with trade-offs. As equipment ages, fleets typically face higher maintenance costs, increased downtime and reduced operational efficiency. At a certain point, those variable costs can outweigh the savings from deferring replacement. The most disciplined operators are actively modeling that inflection point to ensure they are preserving flexibility without materially increasing their cost of operation.
Garwood: With used truck pricing coming off historic highs and remaining volatile, how is TD Equipment Finance adjusting its residual value assumptions for new originations?
Sasso: The general methodology of many equipment finance groups that manage residuals is to value assets under normalized market conditions. That methodology discounts the highs and lows of the market. Unless there is a current or anticipated event (such as a technology change) that could create permanently impaired asset values, we continue to rely on a through-the-cycle methodology that smooths volatility and supports consistent underwriting.
Garwood: When the industry finally moves from “preservation” to “replacement,” do you foresee a supply chain bottleneck or a “cliff” where too many operators try to refresh aging fleets simultaneously?
Sasso: There is real possibility of a more compressed replacement window once confidence returns and liquidity improves. If too many fleets move at once, certain parts of the supply chain, particularly for specialized equipment, could experience some strain.
That said, we expect a staggered return, led by the larger, well‑capitalized fleets focused on normalizing maintenance costs rather than a single, industry‑wide surge.
Garwood: In this “uneven recovery,” are you seeing a preference shift toward leasing to keep debt off the balance sheet, or are operators leaning toward EFA structures to capture tax benefits like Section 179?
Sasso: We haven’t seen a major preference shift on the product side from the trucking client base. However, in other industries, we have seen clients shift towards Tax Orientated Leases based on the new 100% Bonus Depreciation method approved in the One Big Beautiful Bill. Across the board, liquidity preservation and tax considerations appear to be the primary drivers, with clients evaluating financing structures that allow them to keep capital in the business while investing in essential equipment.
Garwood: What specific credit markers distinguish resilient fleets from those struggling to navigate elevated import costs and lower freight rates?
Sasso: The fleets that are proving most resilient in this environment tend to share a few common characteristics. They maintain stable utilization and contract density, even at lower volumes, and they take a proactive approach to maintenance rather than reacting to issues as they arise. They also typically have strong liquidity positions, including access to revolving credit, and management teams that communicate early and often with their capital providers. That combination of operational discipline and financial transparency is a key differentiator in a volatile market.
Garwood: Beyond interest rates, what internal TD Bank “signals” are you watching — such as application volume or payoff trends — to gauge when a meaningful rebound in equipment investment is imminent?
Sasso: The earliest indicators of a rebound tend to show up in operating metrics before they are reflected in financial performance. We are closely watching for consistent improvement in spot and contract freight rates, improved utilization percentages, and greater stability in fuel and input costs. In addition, increased Class 8 truck orders are often a strong signal that operators are regaining confidence and preparing to reinvest in their fleets.
Garwood: As disciplined players acquire distressed competitors, how is TD Bank supporting these consolidations? Are you seeing these as “bolt-on” equipment acquisitions or full-scale corporate integrations?
Sasso: We are supporting both asset‑level, bolt‑on acquisitions and broader integrations. In either case, our focus is on helping operators emerge from these transactions with appropriate leverage and a sustainable, long-term fleet strategy. It’s not just about financing the transaction; we are focused on ensuring the combined business is positioned for stability and growth coming out of the cycle.
Garwood: How has the current volatility in the trucking sector changed TD Equipment Finance’s own appetite for risk within this specific asset class compared to other industries?
Sasso: Trucking remains a core asset class for us, but our approach is highly disciplined in the current environment. We are placing greater emphasis on operator quality, asset specification, and clear visibility into end-use demand, rather than relying on a favorable cycle alone.
Garwood: Even in a liquidity-constrained environment, is the “greening” of fleets still a priority for top-tier operators, or has the transition to electric/alternative fuel tractors been put on the back burner?
Sasso: Sustainability continues to be a long‑term priority for leading fleets, but near‑term investments have become more measured. Many operators are focusing on pilot programs and targeted deployments while maintaining overall capital discipline.
Garwood: What is the most critical conversation a fleet CFO should be having with their lending partner right now to ensure they are positioned for the eventual market turn?
Sasso: The most critical conversation a fleet CFO should be having with their lending partners right now is centered on liquidity strategy. That includes exploring financing structures that align cash outflows with asset performance, as well as options like refinancing or sale-leasebacks that can unlock capital tied up in existing equipment. Experienced financing partners can help operators evaluate these trade-offs and implement solutions that maintain replacement cycles while reducing near-term cash burden.
