C&S Property Services 24 Report post Posted January 3, 2012 Anyone want to share ideas on the benefits of leasing vs buying? I am curious of them. We have done nothing but pay cash for the vehicles and equipment for Aspen Contractors. However we are starting a new venture as well and I am running ideas thru the boss (wife). Share this post Link to post Share on other sites
Beth n Rod 1,279 Report post Posted January 3, 2012 If it were me, I would ask your accountant. Depreciation and how your books look can effect that decision. Also your accountant might have some suggestions as to the type of lease if you go that route. As far as leases, we have don the dollar buy out, and we have also gone the paid cash route. But before any major acquisition, we have asked our accountant. Beth Share this post Link to post Share on other sites
Alexy 85 Report post Posted January 3, 2012 Unless you can not pay cash or qualify for financing stay away from a lease. The depericiation of pressure washing equipment is outrageous initally and you will pay for it and the lease fianancing. I leased a pressure washer and trailer. In the end we ended up paying about 61,000 dollars for equipment that was valued at 23,000 new, at the end of the lease it was worth about 3-4K used. The tax benifits are fair but the bottom line is bite the bullet and buy it outright . I know it hurts but it much much better in the long run. Also you need to figure you will need a inland marine insurance policy to cover the value of the equipment over the life of a lease. Share this post Link to post Share on other sites
C&S Property Services 24 Report post Posted January 3, 2012 Thanks Beth. I was planning on that. Thanks Alexy. Thats what we did so far. I should have been more specific but my question isnt as directed towards equipment as it was towards vehicles. We are looking at buying two new trucks and thats where my question came from. Would it be more of a headache for leasing the trucks? Share this post Link to post Share on other sites
RSuds 24 Report post Posted January 3, 2012 I would not lease a truck because they get rusted and beat up a lot. I also would rather pay it asap and not deal with payments for a couple years after. Try to get 0% finance and you will not feel as bad. Share this post Link to post Share on other sites
Beth n Rod 1,279 Report post Posted January 3, 2012 We don't lease trucks, we buy trucks....we have bought equipment outright and also via lease. Also be sure you ask the accountant about selling a used truck....vs a trade in. Tax advantages there too. Beth Share this post Link to post Share on other sites
BlueBliss 14 Report post Posted January 4, 2012 As an accountant I can say "don't lease in this industry!" There are very few industries where leasing is beneficial. Those few instances seem to be where all lease companies get their "benefits of leasing" sales pitches. It is EXTREMELY unlikely that you will benefit from a lease (unless you're the leasor!). Share this post Link to post Share on other sites
Guy B 70 Report post Posted January 4, 2012 As it's been said it may be better to purchase than lease, yes check with accountant to see which would benefit more. Now that being said, there are just too many good used vehicles out there. I'm a firm believer in paying cash for everything. Sent from my iPhone using Tapatalk Share this post Link to post Share on other sites
C&S Property Services 24 Report post Posted January 4, 2012 I love the responses. Thanks to everyone. To be honest this is going to be my wifes business. So I dont want to dump alot in right away but we already have been having a substantial amount of interests and several contracts written up and we dont have all the i's dotted and t's crossed if you know what I mean. I was kind of figuring it may be easier to get several trucks up and running (thru leasing) vs trying to go get a loan and buy them. Share this post Link to post Share on other sites
Chappy 138 Report post Posted January 4, 2012 i started out paying cash, and didnt buy till I had a job to pay for the equipment outright, (except the first unit.) But 2 years ago I leased a hydrotek skid. I couldnt pull 10k out of pocket and was tired of buying the cheap azz pressure pros. last year I leased another skid. That allowed me to pay off my truck early, buy a new trailer and other things. the lease terms are not bad at all. It helps tremendously. The typical small business can write off all expenses, and buying or leasing didnt change anything for me. Check with several leasing companies for terms before using the one the dealer recommends Share this post Link to post Share on other sites
John T 744 Report post Posted January 5, 2012 Hey Rob be careful with cash transactions. I'll give you a couple of reasons for that.. I've been audited in the past twice and it was the cash transactions for equipment purchases that came into question. Another reason would be just what recently happened and it's retarded. I took out about $10,000 out of my personal checking account to get ready to buy a vacuum set-up and a few other things. The problem was the vac deal I thought I had fell thru.. I put most of the money back.. And then I bought what required a bank check so I put the other cash back and got a bank check to buy the equipment. This is what's crazy. The bank calls my house and They tell my wife that I deposited a little over $10,000 in cash and then I bought some equipment... What set the bank off was that I put $10,000+ cash in.. The morons didn't take into consideration that I took it out of the acct 2weeks earlier.. So they had to check where I got the cash from..ummm my own bank. Then they said because I also have a business acct I shouldn't be buying equipment with my personal acct.. I would have used my business acct but a parking garage we did didn't pay yet and these deals came up.. Today the parking garage and a few other jobs where still waiting on payment.. I was just told anyday now.. It never ends. Cash is king but buying large purchases with cash be careful. Big businesses hardly ever deal with cash because of what my little business just dealt with.. Share this post Link to post Share on other sites
BlueBliss 14 Report post Posted January 5, 2012 I'm sure the cash set off its own red flag, but any transaction at a bank of $10k or more sets off a red flag and requires extra reporting by the bank. For us, it's typically a wc audit that gets upset about any cash transactions. I make large purchase from a personal account often too. Make sure you handle that in your books/capital accounts! Share this post Link to post Share on other sites
John T 744 Report post Posted January 5, 2012 I'm sure the cash set off its own red flag, but any transaction at a bank of $10k or more sets off a red flag and requires extra reporting by the bank.For us, it's typically a wc audit that gets upset about any cash transactions. I make large purchase from a personal account often too. Make sure you handle that in your books/capital accounts! Same here. On my WC audit that's always brought up.. Sometimes I take money out of my business acct. To just get by and then I put it back.. WC audits hate that. Share this post Link to post Share on other sites
jobalthough 9 Report post Posted October 16 Leasing versus buying has distinct benefits. Leasing often requires less upfront cash, allowing you to preserve capital for other investments or operational costs. It typically includes maintenance, and reducing unexpected expenses. However, buying can be more cost-effective long-term, as you own the asset outright and can build equity. For specific financing options, consider reaching out to Florence Bank customer service. They may provide insights into loan options that align with your needs, helping you make a more informed decision for Aspen Contractors. Share this post Link to post Share on other sites
