momofdogs

Your leasing questions answered

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My first post so I will just leave this here for you to process. No way in heck would the tax incentive outweigh the cost we spend in the long run for the monthly payments. Be careful and shop wisely.

 

Equipment Cost: $3,500.00

 

Term:                           12 Months

Monthly PMT:             $455.15

Deposit:                       First Payment ONLY in Advance

 

Term:                           24 Months

Monthly PMT:             $270.15

Deposit:                       First and Last Payment in Advance

 

Term:                           36 Months

Monthly PMT:             $210.15

Deposit:                       First and Last Payment in Advance

 

Term:                           48 Months

Monthly PMT:             $183.15

Deposit:                       First and Last Payment in Advance

 

Term:                           60 Months

Monthly PMT:             $171.15

Deposit:                       First and Last Payment in Advance

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My first post so I will just leave this here for you to process. No way in heck would the tax incentive outweigh the cost we spend in the long run for the monthly payments. Be careful and shop wisely.

 

Equipment Cost: $3,500.00

 

Term:                           12 Months

Monthly PMT:             $455.15

Deposit:                       First Payment ONLY in Advance

 

Term:                           24 Months

Monthly PMT:             $270.15

Deposit:                       First and Last Payment in Advance

 

Term:                           36 Months

Monthly PMT:             $210.15

Deposit:                       First and Last Payment in Advance

 

Term:                           48 Months

Monthly PMT:             $183.15

Deposit:                       First and Last Payment in Advance

 

Term:                           60 Months

Monthly PMT:             $171.15

Deposit:                       First and Last Payment in Advance

so last option you have paid for the item 3 times and still don't own it  :-[ 

and option 1 you have paid $2K over the cash price - 

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It would be cheaper to put it on a high interest credit card than do the lease. I'll just wait until I have the cash, I just could not believe this!

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It depends how your business is setup also.  

 

You're able to write off some if not all of the lease amount as a tax write off.   

I'm not a tax person but I'm told there are some advantages in leasing equipment and cars through your business to get these write offs.   

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This topic is entirely true and not true. It all depends on the leasing company, your credit, the type of lease you want, etc. Leasing has its place just like out right purchase.

For example we bought a HP Latex 360 to replace our L26500. During the process we checked on leases from various providers and purchase loans. Our lowest rate for lease was 2.99% on a 3 year with FMV buyout or turn in at the end, the highest was 6.15% on a 5 year with $1 buyout. For purchase loan which we ultimately settled on it was 5.95% on 5 year. We went with the purchase simply to avoid prepayment penalties.

Check with various providers before you decide, it makes a big difference!

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I leased a  $185,000 piece of equipment for my "day job". 3 years, $16,000 per. I give it back after three years and it's theirs. 100% tax deductible payments. 

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I made it a point to only upgrade if I can pay in cash. I refuse to go into debt just to write off a tax. If I have it bought out right then it is mine, I don't have to worry about the economy taking a down turn and having to let the equipment go back to the company, ruin the credit of the business, and also all the money spent while able to afford it. I see it as the big business and cronyism of the government that has duped the people into thinking there is an incentive to having debt so they can continue profiting off the masses. No thank you. If I can't afford it in cash then it is not my time to grow as a business owner. Think about it this way....Interest never sleeps, never takes a vacation throughout the life of the loan. Yet you need to sleep and would like to take a vacation. So that isn't a fair trade in the deal.

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Thats a good way to operate kirkster. The only problem is if it's something really spendy you may never be able to own one. I bought an embroidery machine about a year and half ago. I did some buying and trading all in a few months but the end result was nearly 20K with all the hoops and such that you need to produce. The machine produces plenty of revenue to pay its payment and also add to my bottom line. I would have been many years saving up for it to pay cash but going with a note on it will have let it help pay for itself in that same time frame while I am able to begin growing that side of my home based business. I DIDN'T go the lease route because the payments were considerably higher than what I went out and found on my own. 

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