- A computer lease is analogous to a car lease in the auto business. It is an agreement where one party essentially rents a computer from a another for a certain duration of time. During the period of the lease, the party paying for the computer can use the computer unlimited as if it were his property, yet the final rights to the computer fall back to the company that leased it out after the lease expires. Generally speaking, computer leasing is a practice used in business, where companies require hundreds of computers or more at a time. Under a lease, payments are made periodically, usually each month, instead in one large lump sum as one would make for an outright purchase.
- Perhaps one of the strongest arguments for leasing computers versus buying them is the trend of continuous technological advancement. Computers that are top of the line one year, are usually middle of the road, or worse only a year or to afterward. When a company purchases computers, it typically will not replace all the company computers again for several years, meaning their computing base will come become obsolete--which is what eventually forces them to buy new computers. With leasing, the company can decide how long to use the computers, and simply trade them back in for leases on new, improved computers at a later time. This ensures that a company will always have fairly new computers.
- Another extremely important factor when considering leasing as an option is cost. While it may seem obvious that leasing is cheaper, since it is like renting and not a purchase, over time leasing is often much more expensive. For instance, if a company bought new computers, and kept them for six years, it would be getting a lot of value out of the technology for a long time. Paying six years on leased computers would almost certainly exceed the initial cost of buying computers. Buying, however, requires a large amount of upfront capital, while leasing requires little, since it is essentially pay as you go. In this way, leasing can allow a company which does not have a huge amount of working capital to get new computers.
