Posts From September, 2014

Leasing vs. Purchasing 

(What to do??)
Posted by Rick Friday, September 19, 2014 12:48:00 PM

Boy, if I had a dollar for every time I have had to answer THAT question!  So, Rick, what is the best thing to do?  Believe it or not, the answer may surprise you a little bit.  In our business, I would have to say that we are at about a 65-35 breakdown...more leasing to purchasing.  Now, that is not to say that leasing is always the answer.  And the problem is that many people associate 'vehicle' leasing with 'equipment' leasing--and they could not be any more different.  Yes, the general practicalities are the same, but in the end, the rules differ quite a bit.

One thing that we always talk about with leasing is the safety of capital.  Why purchase a $15,000 piece of equipment when you can easily get it for $250 a month for the next 60 months?  Why put out those capital dollars for something that will be depreciated over time, not giving you the maximum tax advantages that exist within the lease realm?  Now, there will be some that say, "Well Pav, we can buy this thing and run it until it dies!"  So true.  However, have you ever seen a machine that runs like a champ one day and just klunks out and dies the next?  Very rare.  It usually goes through a period of small breakdowns, followed by more periods of longer breakdowns and then on to the grand finale failure parade.  Know what happens during these periods of events?  Frustration, anger, pleading and begging telepone calls, more frustration and then eventually the reality that the machine is now in need of replacement.  And do you know when Murphy's Law allows this to happen?  At the worst possible moments in history.  These things never occur on YOUR time table.

We also get a chance to talk to people that are always looking for a good deal, or in copy-speak, CHEAP!  Now, all of us are always looking for a great deal for just about any big-ticket item that we buy.  For some people, the "best" deal is the cheapest deal.  And have we learned our lesson yet?  Nope.  We all end up taking the cheapest, blowing it up and wearing it out quickly, and then we let buyers remorse finally tell us what we did wrong initially and then we swallow hard, turn over the price tag, swallow hard again and then realize that we are not going to go through buying junk again.  Moral of the story:  cheaper is not always better.  Purchasing is not always the way to go.  And eventually, you will learn to trust the people that do this for a living and have been at your side for many, many years, saving you money and looking out for your bottom line:  we, experts!  We have been in this rodeo for a long time now and we are not jaded.  We are educated to the industry and we want nothing more than to show you what our education has done for us.  We want to give you the best possible product for the best possible price that is the best solution to your problems.  So, swallow hard and come on down to CBM to talk to us soon!!