So I have generally just bought my printers in the past but now I am wondering if it would be best just to lease so I can stay up to date with the latest technology and get out of the world of repairing it for the most part. I was wondering what is it that most of you are doing? Any advise would be appreciated.
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Question Lease or Buy
- Thread starter K2
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Notarealsignguy
Arial - it's almost helvetica
It's all the same. You write off interest and depreciation or the whole payment. Focus on total cost and go with the least expensive.
Sindex Printing
New Member
I lease with a $1 buyout or a straight conventional equipment loan. It does depend on a couple factors. The main one is the lease rate factor and if you have intentions of paying the equipment off early I would go with a loan.
I have always felt having the cash available is better than having equipment payments especially with supply chain and deals with other businesses closing their doors
I have always felt having the cash available is better than having equipment payments especially with supply chain and deals with other businesses closing their doors
Personally... I'd buy outright, then buy the extended warranty. Latex is something like 2-3K A year... Epson I was just quoted $2000 a year for the R500, $2500 for the R500 with cheap $500 heads replacements. Can purchase up to 5 years on the Epson... so I usually bake in the extended.
$20K for the printer, 12.5K For the warranty - so for $32.5K You can have a top of the line printer that just came out, all parts / repairs expedited for 6 years... Thats roughly $5500 a year for a printer - Lease payments are probably just as high. Sell it for 10-15K after the 5 years, and buy the "Newest" model...and repeat. When you lease you still have to worry about maintenance / repairs.... This way you don't have to really, Grimco has always flown the part we need out next day and fixed it next day for us.... I think we were down for a week once because a part was backordered.... other than that, its been great.
$20K for the printer, 12.5K For the warranty - so for $32.5K You can have a top of the line printer that just came out, all parts / repairs expedited for 6 years... Thats roughly $5500 a year for a printer - Lease payments are probably just as high. Sell it for 10-15K after the 5 years, and buy the "Newest" model...and repeat. When you lease you still have to worry about maintenance / repairs.... This way you don't have to really, Grimco has always flown the part we need out next day and fixed it next day for us.... I think we were down for a week once because a part was backordered.... other than that, its been great.
White Haus
Not a Newbie
We generally lease most of our equipment (w/ $1 buyout) for 48 months.
We did get a loan for a printer a couple years back but the variable interest rate hasn't worked in our favor. It is however open-ended and can be paid off anytime so at least there's that.
We did get a loan for a printer a couple years back but the variable interest rate hasn't worked in our favor. It is however open-ended and can be paid off anytime so at least there's that.
FireSprint.com
Trade Only Screen & Digital Sign Printing
As Notarealsignguy said, the concept of "Lease" or "Buy" is not really the right question to ask. (I don't mean to offend the OP with that statement, I will explain)
The question you need to ask is what makes the most sense financially after you gather all the information.
First, a loan or a lease are not really that different. A company like Geneva Capital will allow you to "Lease" anything your bank would loan you money for in this business. You can almost always get either one you choose.
For a fairly complete list of all the cost factors you need to consider, please see my blog post about this very topic:
firesprint.com
The question you need to ask is what makes the most sense financially after you gather all the information.
First, a loan or a lease are not really that different. A company like Geneva Capital will allow you to "Lease" anything your bank would loan you money for in this business. You can almost always get either one you choose.
For a fairly complete list of all the cost factors you need to consider, please see my blog post about this very topic:
Buying Equipment for Signs & Printing: Lease vs Loan vs Buy
Once you've calculated the total cost of ownership, hit to your cash flow, and tax implications, you can make an informed decision on how to purchase equipment for your sign or print business.
firesprint.com
ProColorGraphics
New Member
I get way better rates from my local bank versus the leasing companies. Ends up way cheaper.
FireSprint.com
Trade Only Screen & Digital Sign Printing
We often find that to be the case as well, but they are often less flexible than a leasing company when it comes to terms and down payment.
you can, of course, lease ANYTHING.
you can bundle supplies & support costs
you need to discuss the difference between an operating lease and a capital lease with your accountant
Signscorp
New Member
There's also how these look on your books. If you're looking to sell your shop anytime in the next couple years, then buying outright, or with a loan is MUCH better than leasing. A lease shows up as a regular expense, where buying the machine outright won't affect your income.
Since shops are bought as a multiple of income, this gets you a higher price if you want to sell.
Since shops are bought as a multiple of income, this gets you a higher price if you want to sell.
Notarealsignguy
Arial - it's almost helvetica
or if you are trying to borrow money, a lease makes your balance sheet look better
Geneva Olson
Expert Storyteller
I bought all of my equipment through a lease program. I am done paying my printer off and it still works like a champ. I've had a few issues, but nothing that wasn't completely fixable. I have my laminator paid off in 2 months. That is completely worth it. And I just bought a new plotter. All of these items have been a great deal for me to lease and pay off at the end. Good sound equipment that just keeps running. I am very pleased with my purchases through leasing. I have a friend who owns a business that uses a roland printer. she is on a continuous lease program and thats what works for her. She just trades in at the end of three years and upgrades every 3 years when the lease is up. Do what makes sense to you.
rjssigns
Active Member
Opportunity costs. This aspect is rarely talked about and is a necessary component when deciding to lease or purchase capital goods.
Simple explanation when buying something outright. What didn't you get to get what ya got?
Leasing: In base terms will generally allow you to get something better than you would otherwise be able to afford.
Vehicles are a prime example of this and why leasing is an attractive option.
Key to it all: Correctly leveraging your existing money supply and/or the ability to obtain financing for capital goods.
Simple explanation when buying something outright. What didn't you get to get what ya got?
Leasing: In base terms will generally allow you to get something better than you would otherwise be able to afford.
Vehicles are a prime example of this and why leasing is an attractive option.
Key to it all: Correctly leveraging your existing money supply and/or the ability to obtain financing for capital goods.
FireSprint.com
Trade Only Screen & Digital Sign Printing
Very well said.
Geneva Olson
Expert Storyteller
THIS RIGHT HERE!
Notarealsignguy
Arial - it's almost helvetica
technically on a vehicle lease you are paying exactly what it is worth. The auto manufacturers make a gamble on the residual value and you finance the depreciation plus interest. If the car is worth more at the end then you lost out, if it is the same then you basically just rented a car, if it is lower then you made out. Most equipment leases are just financing by a different name, a capital lease. With low interest rates and high residuals, operating leases generally don't make a bunch of sense in my eyes. Usually though, when interest is low, residuals are low but times are strange right now.
victor bogdanov
Active Member
With the current inflation leasing, especially with $1 buyout could be better, lock in the payment and it a couple of years you're paying the same payment with a devalued dollar.
I've always purchased cash but my recent printer purchase was 0% interest, $1 buyout lease so why not. Flatbed also leased as the financial charge was under $1k, $1 buyout. Over 5 years that $1k interest charge will be eaten up by inflation so same or better than cash
Also the machines paid for themselves before my first payments were due, I had 100k sqft printed before paying a penny for the machine
I've always purchased cash but my recent printer purchase was 0% interest, $1 buyout lease so why not. Flatbed also leased as the financial charge was under $1k, $1 buyout. Over 5 years that $1k interest charge will be eaten up by inflation so same or better than cash
Also the machines paid for themselves before my first payments were due, I had 100k sqft printed before paying a penny for the machine