Most people prefer to buy equipment they need in the house. In case of high
value appliances, they make take a loan and pay monthly instalments.
However, in the current economic conditions with increasing job losses, leasing
can be a better option.
Leasing equipment has certain advantages which are: You pay for equipment
only for the time you use it
When the duration of your lease is over, you get a
brand new piece of equipment with all the latest features by signing a new
lease.
When a equipment breaksdown
or a part of it is damaged, you do not have to spend your time and money to fix
it.
While starting out, if only one or two pieces are required, it is better to
lease the equipment so that you get a better idea of its usage. At a later
date, you can either buy out the existing equipment or a completely new set of
equipment. .
Before finalising the lease, it is advisable to
have the terms and conditions spelt out so that there is no confusion at a
later date. The bill which will be sent monthly or after a specified period
should meet the agreed terms.
The financial benefits depend on the terms of the lease and the cost of the
equipment. Both provide tax benefits: -Lease payment is a monthly deductible
expense -Buying it outright will let you depreciate the asset over its useful
life (IRS chooses length of depreciation for the asset) .