Leasing??

[amazincaucasian]

Thinkin about leasing a Kubota mini ex. Never leased anything before, so do yall have any input on pros and cons?

 

[Bluegill2]

I might do it for one or two jobs, but not long term.

 

[Buppies]

If it to is to be used for business perhaps but would would be best to ask your accountant as there are a lot of advantages or disadvantages and someone most familiar with your situation should be able to answer this question best.

 

[Ace3]

It has been my experience that leasing works financially if you can use it as a business expence. If you are only using it for personal use it doesn't make sense. Check with your accountant.

 

[JOHNTHOMAS]

I have leased cars in the past but never a tractor.
Now, is leasing just for business or write off or can it be OK for private use. YES
You have to go back to the purpose of leasing or why your considering leasing. No down payment or smaller down payment was one of the reasons on the past for people to lease. Also in the long ago past credit worthyness was also another reason for leasing cars/trucks. In the past there were also some benefits for companys to lease. Most of these reasons from the past have changed. Most car leases now require great credit, down payment in the very small fine print and accountability of business/personal use has to be documented so the personal (mostly) business vehicle has not much write off value if one is staying LEGAL.
OK back to tractor lease. With the 0% 60 months or even the longer terms with low interest rates will show very easily how much a monthly payment will be required to buy it over a specified term. If one gets the monthly payment of a lease over a specific term and then compares the 2 payments side by side will be able to see what the monthly cost is for owning at the end of the term or giving the machine back at the end of the term. Maintenance and repairs required during the lease term are usually the responsability of the individual that is using the equipment, not the dealer/Kubota.
I'm pretty skeptical as to a lease being a better deal at this time over buying it with 0$ down and 0% interest. That was one of the main keys to the benefit of leases in the past, the interest rates determined the monthly payment and sometimes leases were figured on lower interest rates which tipped them over the edge into being a better deal. (Cars and trucks).

 

[thatguy]

Just to clarify...

Lease is normally a long term arrangement (ie more than 1 yr), when a rental is a term shorter than a year - Is this still considered a lease?

Is it a 'lease to own' agreement, where you pay a set amount at the end of the term and keep the equipment

IIRC - a normal lease can be written off as a business expense, BUT a lease-to-own falls under some different IRP category and may or may not be considered a business expense..

Does this 'lease' include maintenance? If not, keep really accurate records of all maintenance (by the mfg recommended frequency) or be prepared to pay for any maintenance needed to 'bring it up to spec'..

Also you will be responsible for any damage out of 'normal wear and tear' (which is vague enough that who knows that that means) but if a rip on the seat is not 'normal wear and tear' be prepared to pay for a new seat when you turn it in.

Are you set up to insure an item like this? the lessor will require it to be insured to their specified amount.

Are you limited in the number of hours of usage during the term (ie - car lease normally include 12k miles/yr anything over that you are billed at the end of the term at a really high mileage rate)

just a few thoughts

brian

 

[amazincaucasian]

Thanks for the replies guys. To clarify, yes it's a lease, not a rental. To be used for public utilities digging. Talked to Kubota yesterday and got the specifics. Also got sticker shock. Would be better for me to buy, but I don't believe I'll be doing either with the price of these things. Haven't talked to the accountant about this. But I had Kubota check on the "cheaper" one....a new kx121 with enclosed cab and angle blade. Over $1200 a month to lease. I'd be allowed 900 hours a year. It's $20 extra a month if I wanted to up the hour allowance to 1200 hrs. a year. Buying it would cost $1130 a month for 48 months. I think they require 1 million in insurance which I have to keep anyway for my jobs. I could pay for it with the jobs I do but I'll stick with my old one and keep an eye out for a good used one