What are the pros and cons of leasing vs buying equipment? As you begin the process of starting a business, or as you start expanding and growing, you’ll face an important decision: should you buy or lease hardware? Your business definitely needs hardware to operate and remain productive, but there are many ways to get that hardware in the modern world. Leasing and buying hardware both have apparent advantages, but is one a better choice than the other?
Let’s start with the basics of leasing vs buying equipment.
In a buying arrangement, a company is going to be individually responsible for purchasing all the individual hardware components they require to operate. If they need laptops, they need to buy laptops individually for each person who works there. If they need servers, they need to buy and install the servers themselves. You’ll need to do this for each piece of hardware required, paying money and spending time and effort to get everything set up. You’ll retain full ownership of all these materials, and can resell them in the future if you want.
In a leasing arrangement, a company signs a contract with a third-party equipment provider. The terms of this agreement will dictate all the variables, but generally, this means the buying company will have access to all the equipment they need in exchange for a regular subscription rate. Additionally, the third-party equipment provider will usually take responsibility for installing the hardware, verifying its functionality, providing maintenance, issuing repairs, and offering support in other ways.
So what are the benefits of leasing vs buying equipment?
- Lower upfront costs. If you buy all your equipment outright, you’ll face huge upfront costs. While there are some financial advantages to this move for some businesses, you’ll almost always have lower upfront costs in a leasing agreement. If you’re just starting a business, or if you don’t have lots of extra capital hanging around, leasing is favorable.
- No shopping around. Most business leaders don’t want to go through the headaches of shopping for each individual piece of equipment they need for the business. With leasing, instead of shopping around, you can have all your hardware and technology needs provided by one source.
- Everything in one package. Even better, many hardware leasing service providers offer everything in one package. In addition to having access to all the equipment you need, you’ll also have regular repairs and maintenance scheduled and ongoing support when you need it.
- No depreciation loss. Thanks to depreciation, most of the hardware you purchase for your business will decline in value over time. If you buy your equipment, you’ll be able to resell it in the future—but you’re probably not going to make your money back. With leasing, you don’t have to worry about depreciation losses.
- Provided maintenance, repairs, and support. Are you unsure how to set up a new piece of equipment? Do you hate the idea of separately budgeting for or managing repairs? Don’t worry. In an equipment leasing agreement, maintenance, repairs, and ongoing support are provided.
- Easy disposal. If you need to get rid of a device because it’s no longer working or because it’s ready for an upgrade, you won’t have the headache of trying to figure out how to securely recycle or properly dispose of this piece of equipment. There are terms in your contract to dictate how your equipment is returned.
- Total flexibility. There are many different types of equipment leasing service packages available, so you have almost unlimited flexibility in what you choose. You can get exactly the hardware you need for your business, without overspending or overcommitting.
- Scalability and growth. Your leasing packages can also grow with your business. If you plan on expanding your physical footprint, or if you know you’re going to need more equipment in the future, leasing provides you with that long-term flexibility.
Ready to start leasing your business’s hardware? Check out our hardware as a service packages!
There are also a few benefits of buying equipment over leasing you should consider:
- Ownership and control. When you buy all your own equipment, rather than leasing, you’ll retain full ownership and control. Under an agreement with an external party, you may be bound by certain requirements and restrictions; if you want to customize all your equipment and have total freedom to do whatever you want with it, buying may be preferable.
- Fewer terms. Hardware as a service contracts and leasing contracts tend to be favorable for both parties, but there are still a number of terms and conditions to which you’ll need to adhere. In many ways, buying is a simpler process, though you’ll still need to do extensive research to make sure you’re getting a good deal.
- Resale value. When you own your equipment, you’ll have the luxury of being able to resell it in the future. As long as you’re not hit too hard by depreciation, you can make much of your money back. Just be careful to wipe your hardware so you don’t risk any data breaches or similar security threats.
If you’re thinking about the option to lease computer equipment, you should understand how computer leasing works, specifically. Through computer hardware leasing, you’ll get access to all the individual devices you need to remain operational, including desktops, laptops, smartphones, servers, and network connection technology. It’s becoming one of the most popular ways to handle your computer equipment needs—and for good reason.
Hardware as a service makes it easy to lease your equipment, rather than buying it. It’s flexible, fast, and convenient. and it can even help you save money as you cover your business’s hardware needs. For more information, or to get started, contact us today!