What factors should be considered when making the decision to lease or buy equipment?
Companies make the decisions to lease or buy on differen occasions. When an asset is leased, it does not become the property of the company and a rent is paid against for some time and then it is returned. On the other hand when a purchase is made, the assets becomes the property of the company. There are different circumstance that advocate the lease or purchase decisions.
A decision to lease should be made when less initial expense is the goal. Leases may be available on flexible terms which are easily managed compared to assets owned. When there is a risk of equipment getting outdated, leasing or renting them is the good option.
Buying equipment has its own advantages. It provides ownership rights to companies and the bought equipment add up to the assets of a company. Companies may get tax incentives when they buy new equipment due to a variety of reasons environmental friendliness being one of them.