Computer Leasing Continued…

Please re-lease me (or let me go)

The monthly lease cost is not the only factor that drives a decision on leasing versus buying. Compare the costs involved with either option by conducting a detailed analysis. Things to consider are the interest rate charged, the length of the lease, and the residual value of the equipment once the lease ends. Other factors to consider:

Know the terms of the lease agreement, and be sure to comply with these terms. Written notice of the user's intentions may need to be provided to the lessor a certain time period before the lease is set to end. Non-compliance may result in the lease being extended month to month at terms unfavorable to the user. The lease may also be renewed automatically.

Decide on a lease term that is realistic. It's never a good idea to switch horses in midstream, and this also applies to computer leases. Basically, any change made once the lease begins will cost money.

Keep track of the equipment. If ownership will be reverting to the lessor at the end of the lease, you're expected to return each and every piece of equipment mentioned in the lease. Penalties for lost or missing equipment can be steep.

Be prepared for the end of the lease. Postponing decisions on replacing leased equipment will only result in the current lease being extended month to month, at considerable cost and loss of productivity.

Shop around. Leasing is a competitive business and a smart shopper can score the best deal for their company.

A New Lease on Life

While the most obvious benefit of computer leasing is the deferring of capital outlay, the more significant benefits are the savings that can be realized over the life of the lease. This is dependent on the lease being researched, monitored and the terms adhered to. Cost savings of approximately 10% can be realized by properly planning and managing a computer lease. Another benefit is that by replacing computer equipment on a regular basis, companies can increase their productivity by using the most up-to-date technology.

By Steve Levenstein