There are many upsides to leasing. Access to higher quality equipment than a business could afford to purchase outright. The opportunity to try out equipment and see if it fits your needs for the long term. Maintenance is often included in the lease, which controls many of the unexpected costs,and there are often nice tax benefits to boot.
No surprise, but the downside is that the lifetime cost of leased equipment is usually higher than if you had purchased it. Leasing agreements can also be unbreakable – you can wind up paying out a lease long after the equipment is no longer useful.
Best advice:
- Determine whether you need the equipment for the short or long term.
- Think carefully about whether the technology is bound to outdate quickly (which is a frequently overlooked consideration). If it is, short-term leasing may be a better option for you.
- Keep in mind that your options are not limited to leasing versus buying new equipment. If appropriate, consider purchasing used equipment, which costs significantly less.
- If you decide leasing is the way to go, try to negotiate a purchase option on the front end that allows you to put a portion of your lease payments toward the purchase price.
- Always have a lawyer review and explain any contracts you sign.