Leasing mowers?

Discussion in 'Rental Equipment' started by Bunton Guy, Nov 25, 2009.

  1. Bunton Guy

    Bunton Guy LawnSite Bronze Member
    Posts: 1,756

    I went to the local mower shop the other day to pick up some air filters. I noticed all the mower on the floor had stickers on them that grabbed my attention. I started looking and they had listed their monthly price if leased through a national lease program. It says "turn in every 2 years and get new"

    How do these generally work leasing mowers? The listed payments are cheaper than what im paying. I'm guessing money down to get those payments? What happens at the end of the two years? they evaluate the value of the mowers and charge you the difference ? or do you seriously just walk away and get new equipment?
  2. ALC-GregH

    ALC-GregH LawnSite Fanatic
    from PA
    Posts: 7,053

    How are we suppose to know. Did you bother to ask the dealer about it or did you wait until you could sign on to LS to ask? Call the dealer up and ask them to explain the details to you.
  3. santafe

    santafe LawnSite Member
    Posts: 191

    hey greg, I'd say there are alot of questions posted on this site that could be answered elsewhere. but if we did that there would be no need for this site. He most likely did not have time to deal with a salesman at the time. Lets play nice.:nono:
  4. ALC-GregH

    ALC-GregH LawnSite Fanatic
    from PA
    Posts: 7,053

    Sorry to sound so blunt but again, how are we suppose to know? Why go beating around the bush when he could easily ask the dealer what it was about. He doesn't have time to ask the person he should be asking but he has enough time to ask here and probably get 20 different answers. Same with the "what boots do you wear" question. I posted a link for him to read the 500 threads posted about "what boots do you wear" to try and make it easy. Unless reading isn't easy then I'd suggest going back to school.
  5. zturncutter

    zturncutter LawnSite Bronze Member
    Posts: 1,308

    I guess he figured since the dealer would be selling the lease he might not get the whole truth, since it would be in the dealers interest to make the lease sale. Getting the perspective of the end users, fellow lawn companies, would make sense to me.:dizzy:
  6. santafe

    santafe LawnSite Member
    Posts: 191

    Ok. I dont need to fight his battles BUT, he may not have had the time during business hrs,but did have time after dark or he needed to be to an appointment or his dog was jumping out of the truck, or his kid called and had to be picked up from school, or ect....
    again I bring the point if we are going to get our answers form some where else what is the need for this site. mabey he wanted the opinion of a lawn man and not a salesman.
  7. pflasch

    pflasch LawnSite Senior Member
    from VA
    Posts: 294

    OR... to ask it another way... is anyone on LS leasing their equipment, and how are the terms? What does your accountant tell you about leasing etc.
    I believe that Bunton Guy is just asking for any general information about leasing that someone on LS might have.
    There's no need to beat anybody up about a question.
    This site is suppose to be a safe place to ask questions... and share knowledge... right?
  8. Kutz Lawns

    Kutz Lawns LawnSite Senior Member
    Posts: 526

    Can anyone tell me where I can dump my leaves?
  9. DeereMan85

    DeereMan85 LawnSite Senior Member
    from Iowa
    Posts: 460

    It sounds like they are advertising what is called an operating lease. Essentially, you are buying a portion of the product's useful life. The way this works is that your dealer sells the equipment to a leasing company for his selling price. The leasing company in turn "sells" you the use of their equipment for a set period of time and hours of use. Depending on the duration and allotted hours, they come up with an estimated residual value when the lease is up.

    Let's say that your mower retails for $10k, and you're doing a 2 year/500 hour lease. We'll use 50% as a residual value. That means the leasing company estimates that the mower will be worth half what it is now after the lease is up, meaning that you are purchasing what they determine to be $5k worth of use. They finance this amount (with interest) to determine your payment. Let's say your interest rate is 6%. So you're financing $5k at 6% for two years, giving you a monthly payment of $221.60. Of course these numbers are all hypothetical.

    There is usually no down payment required, and you are not responsible for the value of the machine at the end of the lease period. You can be charged penalties if the leasing company finds excessive damage or you go over your allotted hours. Otherwise you simply turn it back in, and they sell it at auction.

    You can usually deduct operating lease payments as an expense, but you will want to talk to your accountant about that before doing anything.
  10. MJB

    MJB LawnSite Silver Member
    from Wa
    Posts: 2,869

    Go back to bed grumpy! :waving:
    Why not just let someone else answer his questions that way you won't have too.

    Seriously I leased all 9 of my zero turns, and prefer it. But I paid a dollar at the end of the 3.5 yr lease and own them, never tried to trade it back. Just is easier to only make payments during the growing months here. Total write off too!

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