Leasing

[crysty]

No doubt, leasing any equipment is the best option to save your valuable time and money.

[disneysteve]

I'm guessing this is spam but it raises an interesting point. We all know that leasing cars is a huge mistake financially speaking in most cases. But this post doesn't mention cars, it mentions "equipment". That can be a very different story. If you run some type of business and require specialized equipment, leasing rather than buying could be the better way to go. Leasing may allow you to have equipment on-site that you couldn't possibly afford to purchase outright. Leasing can also be useful when the item in question is something that tends to become outdated quickly due to evolving technology. Rather than buying something that will be obsolete in 2-3 years, lease one and in a couple of years, give it back and lease a new one. That prevents you from falling behind in your technology and prevents you from sinking money into an asset that won't be worth much in a few years and will have limited resale value.

[wincrasher]

My client is just getting a good education on leasing vs buying.

On our project, we leased office trailers and jobsite vehicles.

Here's the math:

10 plex office trailer - $20k a month. Rented for 27 months. Buy-out cost at end $425k!
My estimation is that it could have been purchased upfront for $350k. Mobilization and demobilization and maintenance were all extra costs.

Kubota vehicles. $590 a month. Cost new $16k. Tires and maintenance costs extra during lease.
Buy -out cost at end $12k!

Yes, during the project these items are considered captial cost, but I'm not sure it mattered either way. On an ongoing basis, for operations, I'm sure expensing them is preferable.

[jeffrey]

@disneysteve

Yes, had you not responded turning this into a relevant thread, I would have deleted it

[disneysteve]

@disneysteve

Yes, had you not responded turning this into a relevant thread, I would have deleted it

Occasionally spam posts actually create a topic worth discussing.

[irmanator]

sometimes if it is for a one day project it's beneficial. My mom used to rent a wood splitter for the weekend do a winters worth and send it back.

She also would rent a pig cooker for the annual pig roast. Who wants to store one of those all year?

[disneysteve]

sometimes if it is for a one day project it's beneficial. My mom used to rent a wood splitter for the weekend do a winters worth and send it back.

She also would rent a pig cooker for the annual pig roast. Who wants to store one of those all year?

Those are good examples of when short-term rentals make sense. There are also storage issues to consider. If your mom bought a wood splitter and a pig cooker, would she have where to keep it the rest of the time?

Leases aren't always long-term deals. If you only need an item for a week or a month or two, leasing probably makes a lot more sense.

[EconoMutt]

I used to lease cars in the 80's and made out well.
GM had underestimated the cost of depreciation during that time period.
They would lose their butts on leases.
It's not like that any more. I'd definitely buy today.

[zakity]

Yep, we have rented a jack hammer to take out a concrete slap and a huge wood splitter for wood. We only needed those things for a short time. We will be renting a car dolly this weekend. This will only be a second time to rent one of those. Buying those things definately would not have been a good financial decision.

We do have a little wood splitter, but it is little and only good for softer woods or thinner pieces of oak. The last wood we got was a half oak/half fir batch (mostly three foot rounds) and our little splitter just couldn't handle the oak. We rented a HUGE splitter for one day and the five of us worked our butts off all day long getting all the oak split. It was well worth the money because hand splitting all the oak did not sound attractive at all. For the fir, we just quarter it by hand and then I put the quarter on our little splitter. I have found that there is no better way than to get respect from your 5'9"+ 14 year old son than to be able to pick up a quarter round (and he can't).