Should I Buy or Lease my Computers?
Jonathan C.
Reliable IT Systems for Healthcare | Start-Ups, Upgrades, Security and Compliance Consulting
How much monetary value does a computer lose over time? This can be figured out two ways: the straight-line method and the declining-balance method. The straight-line method assumes the value of the computer decreases by the same amount every year, while the declining-balance method has the computer losing more value when it is newer and less value as it ages. For year one let`s take the original purchase price and multiply it by 20%. Subtract that number from the purchase price, and the result is how much the computer is worth after one year of use.
EX: If a computer cost is $1,000 multiplying it by 20% is $200. $1,000 - $200 = $800 The value of the computer after one year of use is then $800. At this rate each of your PC`s are depreciating over $3 per week regardless of their use, a little over $15 each per month.
The Buying Downsides
1.The initial investment for needed equipment may be too much. Your business may have to tie up lines of credit or cough up a hefty sum to acquire the equipment it needs. Those lines of credit and funds could be used elsewhere to help grow your business.
2.You're stuck with outdated equipment. Computers become outdated extremely quick, eventually your stuck with outdated equipment that you must donate, sell or recycle. A growing small business may need to refresh its technology in some areas every 18 months!
The Leasing Benefits
1.Leasing keeps your technology up-to-date. Computers and other tech equipment eventually become obsolete. With a lease, you pass the financial burden of obsolescence to the equipment company.
2. You'll have predictable monthly expenses. With a lease, you have a Pre determined monthly line item, which can help you budget more effectively and promote a Technology Peace of Mind.
3. You're able to more easily keep up with your competitors. Clients can see how state of the art your office is , giving them a better idea of your business success and a reason to raise the bar when looking for quality services.
If you are interested in maintaining your technology up to date and having a predictable IT budget, I can help create a custom solution for you at no cost! I can bundle the managed services cost (Including Support) and the hardware lease into 1 monthly operating expense. Let`s Connect!
Excellent points, Jonathan. Too many people get caught up in the fact that they will pay finance charges if they lease but do not really consider the whole picture. I like the quote: "If it appreciates, buy it. If it depreciated, lease it." - J Paul Getty