The Advantages of Owning Equipment Vs. Leasing
Business owners must make an important financial decision every time they upgrade their equipment, whether they're buying new computers or office furniture: buy or lease? Both options have their benefits and disadvantages.
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You own it
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When you buy equipment, it's immediately yours. The main advantage of buying equipment is obvious: Business owners who go this route immediately own their new computers, copiers, vehicles or other equipment. Business owners who lease never build equity in their equipment and never outright own it. However, leasing may make more sense when it comes to equipment that has a short lifespan or can become obsolete quickly, such as computers or other forms of technology.
Tax advantages
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Purchasing can save dollars at tax time. There are several tax advantages to owning equipment instead of leasing it. Business owners can fully deduct the costs of some new business equipment in the first year in which they purchase it.
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It's cheaper in the long term to buy, but in the short-term to lease
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You'll have more money to deposit in your piggy bank. It usually costs less to purchase equipment than to lease it. Business owners who purchase a copier for $2,000 will spend less than an owner who rents the same copier for $80 a month for three years. That second owner will spend a total of $2,880 for the copier. However, for new businesses, it might be more cost-efficient to lease. That's because leasing requires a smaller upfront investment.
You won't pay when you no longer use it
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Don't pay for eqiupment you no longer use. When leasing equipment, business owners are obligated to continue making their payments even if they're no longer using the equipment. Owners who buy can upgrade whenever they like.
Every office has different needs
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What makes more sense for your office? Business owners should consider the needs of their own office. Every office is different, and for some leasing makes sense. For others, owning is the best choice.
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References
- Photo Credit Image by Flickr.com, courtesy of D'Arcy Norman Image by Flickr.com, courtesy of Blake Patterson Image by Flickr.com, courtesy of borman818 Image by Flickr.com, courtesy of Carly Watson Image by Flickr.com, courtesy of Freshview
