12/16/2024
*Why would my company lease a Bobcat Mini Excavator, Compact Track Loader, Skid Steer etc rather than purchase one outright?*
This is a great question. There are advantages to both buying and leasing. Many people aren't familiar with some of the specifics of leasing so I'll try and explain a few of them here.
Your company needs a new excavator. The price is $81,288. If you were to put $5,000 down, finance for 72 mos at 1.9%, the payment would be $1,122. Factory warranty is 2 yrs 2000 hrs. To save a little on the payment, you opt to not get an extended warranty. Let's say at 4 years and 4000 hours, there is a major mechanical issue. These things happen sometimes. It's going to cost say, $8000 for replacement parts and labor and however long the downtime is before parts are delivered and the shop can fix it. Or until someone can get a service truck to where it's broken down. Or until you can get a trailer to where it's at, yard a broken down excavator on to a trailer and deliver it to the shop. This could be weeks, we've all seen it. Downtime is money, pulling your guys to go get it is money, and fixing it is money. Meanwhile you are making an $1,122 payment every month regardless of if the machine is running or not. This on top of downtime, repair cost, and being hampered with a machine down right in the middle of a job. Nightmare scenario I know but these things do happen.
Or, you get the same machine, $5000 down at a 24 month, 1250 hour a year lease. That's 100 hours a month, 25 hours a week average. Your lease payment is $1,254, $120 more per month than buying. The difference is: The machine is under warranty for almost the entirety of the lease. This means our outside service, repair and maintenance is covered as well, you call us in the event of a break down, we come to you. At the end of 2 years you have options. Buy the excavator for the residual value we determined at the beginning of the lease, in this case $41,798. If you decided to go 72 months on that, you'd have a payment between $600-$700 a month. You could return the lease machine, in general lease return condition and under the miles, and turn around and walk away. Or, lease another brand new machine, under warranty for almost the entire time, giving your company an all new machine with new features for another 2 years. There are tax benefits to leasing that a business can benefit from as well. I'm not a tax consultant so I won't pretend to know what those are, but you already pay somebody to do that so you can put them to work on it.
Leasing is just another option that may work out well for your specific situation. No matter if you are leasing or buying, for commercial use or for personal use around your property, Graham Bay Area Equipment is here to help answer any questions you may have, to provide a high level of service and expertise that doesn't seem to exist any longer, and help you find the best equipment solutions for your business and home at the lowest prices available.
Graham Bay Area Equipment/ Bobcat of Coos Bay
1560 Ocean blvd
Coos Bay, OR 97420
dealership- 541-888-5594
call or text 541-294-0713
Open 8:30AM to at least 6:00PM Mon-Fri
Saturday available by appointment. Swing by and check us out anytime.
