All businesses need some form of technology. Whether you operate a technology company or a small business such as Tech Equipment, eventually, you’ll need to replace old technology and devices with new ones.
For example, small businesses will need computers and tablets that will eventually break or need to be upgraded. When this happens, businesses need to consider whether to buy or lease. There are pros and cons to both options.
This article will help you decide whether your business should buy or lease new equipment.
Pros of Buying New Tech Equipment
Depending on your budget and needs, it might be best for you to purchase new equipment. These are the benefits of buying new tech equipment.
Buying equipment is usually much easier than leasing equipment because you don’t have to worry about making monthly payments; instead, you’ll pay the total cost up-front and own your technology.
Depending on the type of technology you’re buying, new technology has usually been upgraded with the latest features. For example, suppose you’re an in-home caregiver that uses medical equipment. In that case, you might want the equipment with the latest features to take proper care of your clients and make your job easier.
Additionally, if you work in an office, you might want to use upgraded software to increase efficiency.
Cons of Buying New Tech Equipment
While buying new tech equipment might be ideal for some businesses, others should not consider it because of these downsides:
When you buy your technology, you are responsible for paying for it upfront. Many businesses don’t have the budget to purchase all of their equipment outright because of these high upfront costs. If businesses want to purchase their equipment, they will have to do so in bursts to recover their budget after spending thousands of dollars on tech.
Can Become Outdated
Technology is advancing all the time, and new computers and office technologies come out every year. If you don’t see the benefit in buying right now because a better version of something will come out in the next year, leasing might be right for you.
When you own your equipment, you are responsible for its maintenance. If you use your equipment improperly, you’ll be responsible for hiring someone to fix it or be forced to replace it altogether.
Pros of Leasing
Leasing equipment is a great way for businesses to save money while waiting for the next best thing to come out. These are the benefits of leasing tech equipment.
Little Upfront Costs
Compared to buying, leasing has smaller upfront costs because you’ll pay a monthly fee for using the equipment. Lower upfront costs allow you to upgrade your equipment at one time so all of your employees can be using the best equipment without spending too much of your budget.
Lower Financial Burden
When you lease your equipment, the financial burden of replacing technology falls to the leasing company; it’s up to them to stay up to date on the recent technology in your industry to be able to provide it to you. Of course, if they can’t, you can always go to another equipment provider.
Let’s consider the auto industry, for example. Automakers must use surge generators to perform tests on vehicles and ensure the technology within the vehicles won’t be affected by something such as lighting.
Purchasing surge generators can be expensive, and if one breaks, the company has the option to buy or lease a new one. However, there might not be any reason for a company to buy a new surge generator until they need to make a big order for multiple surge generators.
In that case, an automaker could keep their costs down while still allowing the cars to be properly tested.
Access to Best Technology
If you don’t have the budget to purchase the best technology for your company, you can always lease it to save money. Leasing allows businesses who can’t afford to pay for equipment upfront to be able to use the equipment their company needs to succeed. When you’re ready to test out the newest equipment on the market but you’re not ready to buy, you can lease it instead.
If your leased equipment breaks down, you can contact the leasing company, and they’ll have it repaired for you. As long as you haven’t misused the equipment, repairs and maintenance should be covered in the terms of your contract.
Cons of Leasing
Just like buying tech equipment, leasing has a few downsides, including:
If you’re not careful, you could get stuck into a contract you’re less than happy with. For example, depending on the terms, you may have to pay for the entire lease length even if you no longer need to use the equipment. In this case, companies might ask that you buy yourself out of the contract by paying the total amount you would have paid altogether. So before you lease anything, ensure you understand the terms of your lease.
Leasing equipment can quickly become more expensive than buying because you’re leasing over a long period with interest. But, just like leasing a vehicle, you might think that you’re saving money when you’re spending more over the length of the lease. Leasing might keep monthly costs down, but you might pay more for the equipment overall, and you don’t even own it.
Buying Vs. Leasing
It’s up to you to consider whether leasing or buying is right for you based on your business needs and financial situation. If you don’t require much equipment and you have the budget, consider buying it to save money in the long run. However, if you need to purchase a lot of equipment, leasing might be your best option until you have enough money to purchase it outright. Remember, leasing might look like it’s saving you money because you’ll have lower upfront costs and a small monthly bill, but it can cost more over the years.