Register free!

The Green Industry's Resource Center



Reply
 
Thread Tools   Display Modes
  #1  
Old 09-17-2013, 01:52 PM
KrayzKajun's Avatar
KrayzKajun KrayzKajun is offline
LawnSite Fanatic
 
Join Date: Oct 2006
Location: Harvey,LA
Posts: 10,426
How does lease/purchase work?

Well my Skidsteer should be sold today. So I'll have $9k cash towards a tracked machine.

Equipment sales and rental place by my brothers has an 11' Kubota SVL75 w/ 600 hrs for $32k obo. (Took in as a trade for a 13' SVL90).

Buddy of mine (friends with gen manager)told me they would prolly go as low as $26k to get it off their lot. He said I should go wheel and deal. Get them to do a lease/purchase deal and use my $9k to pay for the year rental w/ buyout at end less the $9k.

How does this work???
Posted via Mobile Device
Reply With Quote
  #2  
Old 09-17-2013, 04:59 PM
southern79 southern79 is online now
LawnSite Member
 
Join Date: Nov 2007
Location: Columbia, SC
Posts: 87
t the end of the lease you have a lump sum still due. Generally around 15% of purchase price. This can be negotiable. When your lease comes up you will buy, refinance, sell or trade your machine to cover balance. A lease looks better on your balance sheet and better matches expenses to the time period incurred. Overall a good way to go.
Posted via Mobile Device
Reply With Quote
  #3  
Old 09-17-2013, 07:00 PM
AWJ Services AWJ Services is offline
LawnSite Platinum Member
 
Join Date: Jun 2004
Location: Ga
Posts: 4,263
If your credit is Good Kubota will finace it at a good rate. I would not do a lease with a large buyout. I would finance the total price and keep my 9k dollars or as much as possible.
Reply With Quote
  #4  
Old 09-17-2013, 07:03 PM
xc2010 xc2010 is offline
LawnSite Member
 
Join Date: Jul 2007
Location: STL
Posts: 43
Quote:
Originally Posted by AWJ Services View Post
If your credit is Good Kubota will finace it at a good rate. I would not do a lease with a large buyout. I would finance the total price and keep my 9k dollars or as much as possible.
I would agree leasing is usually only a good situation if you rack up a large amount of hours in a short period of time
Reply With Quote
  #5  
Old 09-17-2013, 07:53 PM
AEL's Avatar
AEL AEL is online now
LawnSite Bronze Member
 
Join Date: Oct 2009
Posts: 1,603
Leases are an excellent idea if you plan to purchase the machine at the end. Put your 9k down lease the remainder with a $1 buyout at the end of term. Your payments are now considered rental payments thus allowing you a larger write off then financing.
Posted via Mobile Device
Reply With Quote
  #6  
Old 09-17-2013, 08:12 PM
AWJ Services AWJ Services is offline
LawnSite Platinum Member
 
Join Date: Jun 2004
Location: Ga
Posts: 4,263
Quote:
Originally Posted by AEL View Post
Leases are an excellent idea if you plan to purchase the machine at the end. Put your 9k down lease the remainder with a $1 buyout at the end of term. Your payments are now considered rental payments thus allowing you a larger write off then financing.
Posted via Mobile Device
That is not always true. There are multiple ways it can affect your buisness. Here in the states you can write off the payment on a loan 100% as well. One advantage too a straight out loan is you can actually use the complete purchase price as a deduction for one year or divide it between multiple years or just write off the payment each month. A lease limits how you can use the deduction. Of course I highly advise consulting your accountant for better clarification.
Reply With Quote
  #7  
Old 09-17-2013, 08:19 PM
southern79 southern79 is online now
LawnSite Member
 
Join Date: Nov 2007
Location: Columbia, SC
Posts: 87
IRS may not consider a $1.00 buyout a lease. Depends how your accountant interprets the rule and if he/she can defend their position.
Posted via Mobile Device
Reply With Quote
  #8  
Old 09-17-2013, 08:54 PM
ztman ztman is offline
LawnSite Senior Member
 
Join Date: May 2012
Location: mountain pa
Posts: 812
Quote:
Originally Posted by KrayzKajun View Post
Well my Skidsteer should be sold today. So I'll have $9k cash towards a tracked machine.

Equipment sales and rental place by my brothers has an 11' Kubota SVL75 w/ 600 hrs for $32k obo. (Took in as a trade for a 13' SVL90).

Buddy of mine (friends with gen manager)told me they would prolly go as low as $26k to get it off their lot. He said I should go wheel and deal. Get them to do a lease/purchase deal and use my $9k to pay for the year rental w/ buyout at end less the $9k.

How does this work???
Posted via Mobile Device
If you know you are going to buy the machine at the end of the lease, buy it now and finance the would be residual value under the lease. Lease/purchase is mainly for the benefit of the finance company. They retain title/ownership during the lease so if someone defaults, they don't have to go through the formalities of a repo.
__________________
I don't mind spending money, I mind wasting money!
Reply With Quote
  #9  
Old 09-17-2013, 10:15 PM
Marek Marek is online now
LawnSite Bronze Member
 
Join Date: Nov 2005
Location: Maryland
Posts: 1,338
The Kubota LS 75 is a nice little machine but lacks hydro flow for attachments, does it have a enclosed cab ?
Reply With Quote
  #10  
Old 09-17-2013, 10:50 PM
bobcat_ron's Avatar
bobcat_ron bobcat_ron is offline
LawnSite Fanatic
 
Join Date: Nov 2007
Location: Abbotsford, British Columbia
Posts: 9,952
I did a $1.00 buy out on my last machine. Worked great, my accountant loved it and I got a better refund cheque every 3 months. But it was a bugger to get out of it when I handed everything over to RB Auctions.
Posted via Mobile Device
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump





Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Copyright ©1998 - 2012, LawnSite.comô - Moose River Media
All times are GMT -4. The time now is 12:16 AM.

Page generated in 0.07442 seconds with 9 queries