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Discussion in 'eXmark' started by longslawn, Nov 19, 2001.
how does your pro lease work? What is the plus and minus to lease vs buy.
The payment principle is very similar to a loan. The lending company calculates what you payment is and you of course make payments each month. The difference is that at the end of the lease you have an option to "buy out" the mower or simply return it to the dealer.
The advantage of the lease is that (you'll want to consult your accountant) the payments themselves are tax deductible. Instead of depreciating out your mower over a period of years you simply treat your lease payments much like an expense on your income tax records. This allows you to get full tax benefit of your payments when they occur and not spread out over a depreciation period. Another advantage of the lease is that you don't need to hassle with the disposal of your used equipment. For some people negotiating the trade in value of a machine that you paid $8000 for two years ago and is now worth much less can be a little unpleasant. With a lease you can choose not to buy out your used mower and purchase a new one with a great deal less negotiation and headache.
Again you really should consult your banker or your accountant. They would usually have a much better handle on the advantages and disadvantages of loan vs. lease vs. cash.