When it comes to expensive machinery and equipment, it can be challenging to decide whether it makes more sense to buy or lease the equipment. Ideally, everyone would like to own a piece of equipment that they need for personal use or for their business,but sometimes it is impossible. The main problem many people face is that their budget wouldn’t allow them to own the machinery they need. However, some situations warrant a person to consider buying the equipment especially when it would be used for a long time after the purchase.
The three factors that would determine whether a company or individual settles on buying are the budget one has to spend on equipment, how frequently the machine will be used and its general functionality. As we have already seen, the cost factor is the main thing people consider when they are faced with such a choice. However, some individuals or companies have enough money and may need to consider other factors aside from cost. They may want to understand if they really need the machine and if so, how often will it be in use. If the machinery is key for day to day activities and will be in use for more than five years, it is safe to say that buying is the best bet. To understand whether buying or leasing is the way to go, we must look at the advantages and disadvantages of both.
- The fact that you are the sole owner of the machine gives you a sense of peace because you don’t have to worry about it getting broken or stolen and owing someone. You can, therefore, decide on what you want to do with it without havingto consult another party.
- When purchasing your own machinery, there is less paperwork involved apart from proof of ownership documents and warranty agreements. Leasing has a lot more paperwork as the machinery belongs to someone else.
- The machine is always at your disposal compared to leased machinery that may be unavailable when you need it most.
- When buying machinery, you can choose what you need in terms of features, model, attachments,etc. which may not be the case when leasing. What they have is what you will get.
- You can always sell the machinery after you are finished with it. Depending on the age of machinery, you can get a customer who needs it more to buy it from you through various channels.
- There are tax incentives that have been included in law when one buys used machinery.
- Compared to leasing, you will have to spend more money to purchase machinery.
- With the rapid advancement in technology, there is always a risk that another model is in the works. This means that as a buyer, you may have obsolete machinery on your hands which may be hard to sell afterward if a newer model is unveiled.
- When you own equipment, you are the one that will shoulder all the repairs and maintenance costs. Depending on the availability of spares, you may have to spend more on repairs if the machine breaks down. This problem greatly affects someone who buys poor quality machinery from the word goes.
- It is pocket-friendly especially when someone requires to use the machinery for a shortperiod. This would especially be important for someone running a small business without a huge capital to acquire equipment.
- If you are in an industry where technology keeps changing, you are better of leasing equipment so that you are not stuck with old equipment.
- When leasing, you can get expert advice from the professionals in the leasing company.
- If you keep the machine in good condition when using it, the maintenance cost is up to the leasing company which can be a huge financial weight off your shoulder.
- You cannot claim ownership to the machinery so all the benefits that come with owning the equipment wouldn’t apply in your case.
- The terms and conditions are determined by the leasing company,and you may have no other choice than to agree because you need the machinery.
- If the leasing company is out of product, you may have to wait for long periods before you get to use the product.
- Leasing is more expensive in the long run if you are leasing for long periods. It is, therefore, suitable for people who need machinery short term.
Buying or leasing is dependent on an individual and business. What works for one person may not necessarily work for you. It is best to evaluate your budget and needs before deciding whether to but used metal working machines or lease them.