Cost seems to be the most important factor when it comes time to acquire new equipment. It doesn’t matter whether you manage a construction site, own a business, or are an average person – you need to consider your capabilities and current situation before making any big decisions.
Aside from the cost, there are several other factors you should consider before deciding whether to lease or buy the new equipment you need. Below, we’ve put together a list of questions whose answers will help you decide which option is right for you.
1. Do I Need the Latest and Greatest Equipment to Do the Job?
If you work in an industry that requires you to stay up to date with the most advanced technology (medical, for example), leasing may be in your best interest. It will allow you to acquire the latest and greatest models faster, meaning you can do your job more efficiently.
While it’s nice to buy medical equipment, it’s also important to have the most advanced technology at your fingertips. So, before you’ve even paid off your equipment, a newer, better model may hit the market. Some machines and devices also require servicing as they age. Leasing new equipment and upgrading regularly will eliminate the hassle and expense involved in the maintenance of older technology.
2. How Much Money Do I Have to Spend Upfront?
The cost is often the number one factor in acquiring new equipment. If you’re like most business owners or managers, you have a tight budget to work with, which means you likely don’t have a ton of money for a down payment.
If you purchase your new equipment via financing, you’ll likely need a hefty down payment. If you lease, however, you usually don’t need to put as much money down, and you often have leeway to negotiate a flexible monthly payment plan.
3. Do I Want to Deal with Contracts and Payment Terms?
Lease contracts can sometimes be confusing. There are rules you must follow, restrictions you must adhere to, and of course, there’s that constant fear of losing your much-needed equipment should you fall on hard times. Are you prepared to deal with all that?
If you buy your new equipment outright, there are no contracts, no monthly payments, and the equipment is yours to do with as you please. For some people, this factor alone is enough to make buying new equipment rather than leasing it an attractive option.
4. What Kind of Equipment Do I Need?
Depending on your industry and even the type of equipment you want to get, you may be limited as to what you can obtain if you lease. The type of equipment you need may not be available on a lease contract, which can be disconcerting to some people. If you can buy rather than lease the equipment you need, you’ll likely find you have more options available to you.
5. Can I Sell the Equipment When I’m Done with It?
If you own your equipment, you have the option of selling it when you’re done using it to recoup some of its cost. This can help you acquire newer, more advanced equipment. Is selling the equipment an option? If so, you may want to purchase the equipment you need rather than leasing it.
Buying new equipment can be expensive no matter what industry you’re in. When you need new technology, ask yourself the questions listed above to determine whether buying or leasing it will be a better option.