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buy or lease

By shiny_topadm ·
Hi all, I'm looking for opinions on the pros & cons of leasing computer systems instead of buying. I work for a well-established small business that (historically) purchases equipment outright. I run a fairly new RS/6000 server, but we have several old stand-alone PCs (still working) that probably should be replaced with devices that can run the latest versions of the most desirable software. [When I say old, I mean 386 & 486 with DOS apps.! I do have an NT 4.0 server and some Win95 boxes, too.] Upper Management seems to be less than enthusiastic about doing anything, primarily because of the cost. If their concern (and I don't know for sure) is "cash-out-of-pocket", then leasing (as promoted by many vendors) might be worth discussing. What are your opinions?, What should we watch out for?, What have your experiences been?

Thanks in advance, Will

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by RealGem In reply to buy or lease

The classic benefit of leasing is that you don't pay large purchase prices. However, you cannot depreciate the asset and reduce your corporate income by that amount either.

Leasing may lower short-term cash expenditures, but be certain that thisis a good long-term strategy.

If your company does not upgrade technology very often, and if you're still using 386s I suspect that this may be the case, then purchase might actually be the best option for you. Remember that leasing is like renting - you never stop paying for it. If you purchase your home, at some point it is paid off and your cash expenditures fall.

Leasing, however, gives you the option of keeping up with the technology because you can always lease newer equipment.Watch out for:
- really long-term leases.
- cancellation penalties
- support fees and requirements. This will effect your support group.
- options to purchase
- training costs for staff as they learn the new operating systems and costs
- compatibility of your current suite of applications with the new hardware.

Note that those last two are issues involved with the upgrade, whether you purchase or lease, but be aware of these costs. You might consider a vendor that offers free training...

You really need to know what the objectives are. If it's just cash flow, then find out for sure. If productivity is a benefit, then indicate how leasing will help staff be productive by giving them faster computers.

We have both leased and purchased, and we continue to purchase. This allows us to maintain control instead of being at the mercy of a vendor.

Good luck.

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buy or lease

by shiny_topadm In reply to buy or lease

Tahnk you for responding, I appreciate it.

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buy or lease

by shiny_topadm In reply to buy or lease

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