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Everyone that has acquired a car or listened to the radio is familiar with automobile leasing. However, many are not familiar with the availability of leasing in many other industries. For instance equipment leasing, office equipment leasing, medical equipment leasing, software leasing and even employee leasing have all risen in popularity over the years. This is in addition to other forms of transportation leasing, such as aircraft leasing, truck and fleet leasing. A lease is a contractual arrangement in which a leasing company gives a customer the right to use its equipment for a specified length of time with a specified monthly payment. Depending how the lease is structured, the customer can purchase, return, or continue to lease the equipment once this agreement expires. In today’s market, almost every type of organization in the world currently uses some form of equipment leasing. According to a recent survey, over 80% of US businesses lease at least one of their large equipment acquisitions and of those, nearly 95% say they would lease again. Equipment leasing accounts for approximately $200 billion a year; which is one third of all capital investment. The basic principle of automobile leasing is that you pay only for what you use of the vehicle. The major advantages of leasing are that leasing requires a lower initial cash outlay and the monthly payments are lower than a loan. It's not possible to simply say that one is always better than the other because it depends on your own particular situation and preferences. However, with the lower cost to acquire the equipment and the lower ongoing costs, leasing is definitely an option that needs to be considered in any new acquisition. |
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