Question Lease or Buy

[Notarealsignguy]

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

Huh? There is no interest on a lease. Also, how is inflation going to effect any loan, lease or purchase? They cant come back after you buy it and tell you to pay more. If anything, inflation is a good argument to purchase and own. The residual on used machines is going to be strong for a few years at least with the shortages now and you can bet replacement costs are going to keep going up.

 

[victor bogdanov]

Huh? There is no interest on a lease. Also, how is inflation going to effect any loan, lease or purchase? They cant come back after you buy it and tell you to pay more. If anything, inflation is a good argument to purchase and own. The residual on used machines is going to be strong for a few years at least with the shortages now and you can bet replacement costs are going to keep going up.

leases ($1 buyout makes it more like a loan) usually cost more than paying cash, call it interest, financial charge, loan charge whatever.

Lock in a payment now with a lease/loan and you'll be paying less and less as the dollar is inflated. Your $500 payment locked in now will be more like a $400 payment in a couple of years after inflation

 

[victor bogdanov]

Huh? There is no interest on a lease.

take roland for example from their website:

VG3-640 MSRP $22,495 US
Lease: $450/month for 60 months = $27000

what do you call that $4505 price difference if not interest?

 

[Notarealsignguy]

take roland for example from their website:

VG3-640 MSRP $22,495 US
Lease: $450/month for 60 months = $27000

what do you call that $4505 price difference if not interest?

Profit. It isn't interest. I also dont see how you could promote a lease when it's gonna cost you $4500 more than buying it outright. With low bank rates, you could finance it much cheaper too. I have never seen a capital lease that was competitive with a standard loan. You also owe the entire lease stream if you sell it or want to pay it off early. With a loan, you save the interest and only pay the remaining principal. You also pay sales tax on the full $27k where a loan you only pay on the principal amount. As far as I know you don't pay tangible tax on a lease which may be a benefit but I doubt it pencils out.

 

[victor bogdanov]

Profit. It isn't interest. I also dont see how you could promote a lease when it's gonna cost you $4500 more than buying it outright. With low bank rates, you could finance it much cheaper too. I have never seen a capital lease that was competitive with a standard loan. You also owe the entire lease stream if you sell it or want to pay it off early. With a loan, you save the interest and only pay the remaining principal. You also pay sales tax on the full $27k where a loan you only pay on the principal amount. As far as I know you don't pay tangible tax on a lease which may be a benefit but I doubt it pencils out.

The roland lease charge is pretty high, I would by cash in that case or look for other finance options but there are better deals out there

I have 0% lease/same cash as on my colorado and not even $1000 over cash price on my flatbed though canon financial, both are $1 buyout leases. Id say hard to beat that

You do have to pay the tangible tax (personal property business tax as it is called in Texas). The lease company gets the bill and passes it on the the end user. Never paid sales tax on any equipment though

 

[Notarealsignguy]

You do have to pay the tangible tax (personal property business tax as it is called in Texas). The lease company gets the bill and passes it on the the end user. Never paid sales tax on any equipment though

Oh, well that stinks. I forgot that rental companies also have to pay tangible (personal property) on their rental assets.