intheelements
ArboristSite Member
What is the opinion of the advantages or disadvantages of leasing vs owning your equipment. specifically stump grinders and chippers
advantages / disdvantages of leasing vs owning equipment
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begleytree
H. sapiens moderatus
I would like an answer to this as well. lots of different info out there. I have always purchased in the past and would like more current info to see if I could benifit from leasing verses buying, or the lease to buy options with the $1 buyout.
-Ralph
-Ralph
neighborstree
ArboristSite Operative
i wouldnt know the diferance. im only 23, started on m own when i was 17. i now have
30,000 skid loader
55,000 bucket truck
30,000 bandit 1590
46,000 dodge 3500 my baby lol
tons of saws. misc equipment, dump trailers and what not
and im buying a 50,000 log truck this week.
not bragging. and im not the best or the biggest. but i own everything. bought it all cash due to no one wanting to finance a "kid" a hundred grand. i would love to lease equipment, beat the hell out of it and give it back like this:deadhorse: ahhaha. but since i own it all i baby my equipment
30,000 skid loader
55,000 bucket truck
30,000 bandit 1590
46,000 dodge 3500 my baby lol
tons of saws. misc equipment, dump trailers and what not
and im buying a 50,000 log truck this week.
not bragging. and im not the best or the biggest. but i own everything. bought it all cash due to no one wanting to finance a "kid" a hundred grand. i would love to lease equipment, beat the hell out of it and give it back like this:deadhorse: ahhaha. but since i own it all i baby my equipment
arbor pro
Addicted to ArboristSite
It all comes out the same in the end
I've been in business for 20 years and every year at tax time I again ask my accountant whether I would benefit by leasing rather than buying equipment.
His answer is always the same - it all comes out the same in the end. If you buy, you can write off interest and depreciation. If you lease, you can write off interest and principal but not depreciation. If you have an experienced accountant advising you in such matters, he/she will tell you that the depreciation and principal amounts pretty much come out even over time.
My advice is, if you're in business or going into business and you don't already use an accountant for your year end income taxes, it might be time to start using one. They can be very helpful with matters of fixed asset amortization and depreciation and, for the couple hundred dollars a year that it will cost you to have them do your taxes, you'll get way more than that back in tax savings they find you.
I've been in business for 20 years and every year at tax time I again ask my accountant whether I would benefit by leasing rather than buying equipment.
His answer is always the same - it all comes out the same in the end. If you buy, you can write off interest and depreciation. If you lease, you can write off interest and principal but not depreciation. If you have an experienced accountant advising you in such matters, he/she will tell you that the depreciation and principal amounts pretty much come out even over time.
My advice is, if you're in business or going into business and you don't already use an accountant for your year end income taxes, it might be time to start using one. They can be very helpful with matters of fixed asset amortization and depreciation and, for the couple hundred dollars a year that it will cost you to have them do your taxes, you'll get way more than that back in tax savings they find you.
Oly's Stump
ArboristSite Operative
I agree with Arbor Pro. I leased 1 piece of equipment back in the 80's with a $1 buy out. Ever since that I have purchased either with no loan or had a loan. My accountant advises me how much equipment I need to purchase the coming next year so I don't have to pay uncle Sam.
ShoerFast
Tree Freak
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Just .02 cents worth, other then the tax break, vs a tax credit. Leasing (depending on the contract) could have advantages over owning something that your only going to use occasionally.
If you take one major repair hit on something you own over a lease agreement that includes repairs , your difference is huge.
If you take one major repair hit on something you own over a lease agreement that includes repairs , your difference is huge.
supergrumpy
ArboristSite Lurker
leasing is a business
like he said leasing is a business
leasing company will lease you almost anything, they borrow the cash to buy the unit then collect enuf from you to cover their costs plus make a profit
part of their profit is the sale of the leased equipment after lease term is up,
if you turn in a trashed piece of equipment then they have to include that cost in their prices or go out of business
some contracts bind you to pay the difference between calculated residual cost and what they actually realize on the sale, they can quote you a much cheaper lease that way as you have good reason to baby the machine
when we compare lease versus buy, just about everytime, buying is cheaper, if you don't have the cash to buy then lease is the way to go, thats what it boils down to
like he said leasing is a business
leasing company will lease you almost anything, they borrow the cash to buy the unit then collect enuf from you to cover their costs plus make a profit
part of their profit is the sale of the leased equipment after lease term is up,
if you turn in a trashed piece of equipment then they have to include that cost in their prices or go out of business
some contracts bind you to pay the difference between calculated residual cost and what they actually realize on the sale, they can quote you a much cheaper lease that way as you have good reason to baby the machine
when we compare lease versus buy, just about everytime, buying is cheaper, if you don't have the cash to buy then lease is the way to go, thats what it boils down to
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