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Lease Vs. Buy - Laptops in particular

By ohiois ·
Does anyone have any recomendations as to which would be most beneficial in this case? Our agency issues over 300 laptops to healthcare workers that need to use a proprietary software at bedsides. We have been doing this for about five years now and the number of laptops that have been decommisioned due to spec upgrades, wear and tear, and just plain outdated technology is becoming costly and painful. Currently we are issuing IBM X31 Thinkpads due to their lightweight and reliability. We seem to be going through an entire model after only 1 1/2 to 2 years. This is becoming extremely costly. It is also becoming more and more difficult to resell laptops that are unformatted with no OS and no floppy or CDROM drives. We have begun leasing them from IBM Global Leasing, but I'm not sure this is going to save us anything but the hassle of disposing of them. Does anyone have any suggestions?

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Disposing of used computers

by Info-Safety, LLC In reply to Lease Vs. Buy - Laptops i ...

It seems to me your biggest problem is making sure that you comply with HIPAA when disposing of them. This means overwriting the hard drive multiple times, even when returning from lease. You should consider selling to stores that specialize in used computers, as they frequently buy in bulk. Here is one such place.

Practical Computer, Inc.

There are probably plenty more like them.

Good luck.

Craig Herberg

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Absolutely a priority!

by ohiois In reply to Disposing of used compute ...

We always make sure that we completely wipe out the hard drive! Even with the leases this is our top concern. Thanks for the tip.

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Good looking out

by In reply to Disposing of used compute ...

Another way to avoid the HIPAA grief is to use a commercial shredding tool, like Winshredder or a freeware tool like Chaos Shredder. Even without HIPAA it would be a good idea-- its a sad old world we live in.

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Sad indeed...

by ohiois In reply to Good looking out

Some people don't seem to have enough to do with their free time, except to try and figure out how to make a living at someone else's expense.

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The only reason that you would buy...

by Hockeyist In reply to Lease Vs. Buy - Laptops i ... for business is if you have more money than you know what to do with. There are some exceptions and that relates to items that will last more than several years past the lease end date which don't date technically, such as a hammer or desk.
You have to take into account the item's NPV by purchasing v's the NPV of the cash flow if you leased.
I have spoken to several business managers (accountants) about this dilemma and they agree that this is the case. There is even a formula that you can use to support leasing v's purchase.
I did a quick Google and found the following would be useful to you (there are a lot more - just Google "lease versus buy")
Different countries give different tax breaks for leasing and depreciation. The previous company that I worked for was based in Denver and they determined that 2.5 years was the optimum lease period there while in Australia it is 3 years on computer equipment.
One more point. To make it easier to determine who will give you the best deal when it comes to leasing with regards to cost of leasing, break the costs down to how much it would cost you per $100 per year to lease the item. It is then easier to see (in a table) if you get a better deal if you lengthen or shorten the lease period by 6 months. Some deals look better than others until you look at the cost per $100.

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by ohiois In reply to The only reason that you ...

Those will be useful tools with the board. We are non-profit, so we don't have to worry about tax incentives. But the calculations will still be very helpful.

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by angry_white_male In reply to Thanks!

We're in the public sector and tend to get a good 5-7 years out of our desktop PC's and 4-5 out of the laptops (that is the ones that aren't dropped, stolen, left on top of someone's car, etc...). Laptops are something that should be purchased only if the user requesting it has a real legitimate business need for it. I find that most people who have laptops use them as their home PC's or to keep them entertained while on the road.

We're starting to replace desktops every 5 years - telling our users that shiny new PC on their desk is theirs for the next 5 years and it will stay with them as they move about the company until it's time to replace it. One practice I put to an end was giving the execs the new stuff every couple of years and cascading down (my boss tends to give them the newest stuff first to keep him in their good graces). The result was that a lot of time and effort was expended with this practice and caused resentment amongst the junior staff still plodding along with their hand-me-down Pentium-2.

I belive most lease terms are around 3 years for computer equipment. We get state contract pricing on everything we buy, so compared to leasing (and mind you I haven't crunched the numbers) for us buying the stuff outright we come out in the end.

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Definate Need...

by ohiois In reply to

A decision was made by our Board of Directors to purchase a proprietary software allowing for bedside documentation. Since most of our patients are home-bound this requires them to carry laptops. This was not a choice made by IS, but a directive from the board down.

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Here is your research:

by Pr0x1 In reply to Lease Vs. Buy - Laptops i ...

This topic has been around for a long time, and I was published back in 2000 on the subject, however, times have changed, and so has the technology. So my view, while basically the same, has changed. You will need to make your OWN decision given your factors and the decision points in your research. HEre are some articles to help you with that:


Good one:

You can easily do your own google or msn search, and you'll get TONS for >> laptop "lease versus buy" << , all you have to do is add a couple of other tags and you'll get what you need.

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Lease, not Buy

by Italian In reply to Lease Vs. Buy - Laptops i ...

The lease should be a three year lease with No residual value and with interest at lease two points below the primary rate. If you do the calculation usind IRR you will see the benefits.
Make sure that the insurance is included in the deal and you are covered with a good SLA in terms of repair and replacements.
After the three years period (no residual) you have a choice to resell the notebook to the user (for his kids etc) and/or sell them within the organisation to recoup some money. After three year you present the owner with another New notebook. Same lease, same procedure.
1) your notebooks will be always "new"
2) you can deduct the expenses of lease from the bottm line as "expense" without incurring in lengty calculation on depreciation
3) you make the owner happy to have his old norebook for home use!
4) etc...etc... etc..

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