Leasing Services > Lease vs Purchase
The Lease vs Purchase Decision
The challenge facing you as an equipment or finance decision-maker is to develop an effective strategy for acquiring and managing your company's assets. Managing technology means being able to accommodate growth and change, rapidly and cost effectively. The fast pace of today's economy requires that you have the flexibility to embrace the changing market conditions.
Most organizations define an asset as something that appreciates in value. When you purchase technology equipment, the effect is often just the opposite. The fast pace of change in both technology and end-user needs can quickly turn "assets" into actual liabilities.
Leasing distributed technology, on the other hand, allows you to acquire only the use of the technology, not the equipment itself, ensuring that the assets remain true assets. For this flexibility and other reasons noted in the chart below, leasing is an important cost -effective tool for acquiring and managing equipment.
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Introduction
- Leasing vs Purchase
- Lease Advantages
- Lease Programs
- Information Technology
- HealthCare
- Capital Equipment
| Leasing | Purchasing |
| Financial life equals useful life | Book value is greater than market value at time of disposal |
| Leasing provides the discipline to enforce standards and reduce support cost | Asset diversity and lack of standards increase support cost |
| Replacing leased assets is cost effective and simple | Upgrading owned assets is expensive and cumbersome |
| Leasing eliminates excess | Purchasing intensifies asset build-up |
| Lessor assumes disposal responsibility | Disposal of assets is highly regulated, time consuming, and expensive |
| Low monthly utility fee | Capital Intensive |
| Leasing allows cash flow flexiblility | High budgeting and forecasting costs |
| Optimal technology increases user productivity | Older assets reduce user productivity |
| Potential off-balance sheet financing and creative financial structures | Financing affects the bottom line |
| Flexibility | Inflexibility |