The Pros & Cons of Leasing Technology in 2022

When you’re ready to invest in new technology, there are two options on the table. The first is leasing. This allows your business to access new tech with little upfront cost, and more flexibility, and guarantees that your equipment will be up-to-date as technology updates. And second: buying. It comes with a larger upfront cost but gives you the right to use this equipment forever (or until an accident or malfunction). You have to decide what’s best for your company before you contact manufacturers and make a final decision. Let’s dig a little deeper.

Leasing Pros:

Stay up-to-date:

By leasing all the equipment you need, you can be free of all the financial responsibilities if it becomes obsolete, and you’ll have access to all the latest technologies. Recently, 65% of respondents to an Equipment Leasing Association survey said that leasing’s number one benefit is being able to upgrade your technology.

Predictable Expenses:

You’ll have predictable monthly expenses. With a lease, you have a pre-determined monthly line item that can help you budget more effectively. Thirty-five percent of respondents to the Equipment Leasing Association’s survey said this was leasing’s second-highest benefit.

Reduced Upfront Costs:

Leases usually do not require a down payment, so you can get new equipment without draining your bank account.

Stay Competitive:

Leasing enables you to compete with larger competitors without sacrificing your financial resources. For small businesses, leasing may enable you to grow and scale at a quicker pace than if you had to save and utilize cash.

Leasing Cons:

Higher Long-term Cost:

Leased technology will be more expensive over time than if you buy them. For example, that $4,000 piece of equipment would cost you a total of $5,760 if leased for three years at $160 per month, but only $4,000 if you buy it outright.

Contract Obligations:

Leases are often long-term, so it is not uncommon to find yourself with a lease you no longer need. This can vary based on your lease terms and contract but it’s important to keep the terms of your contract in mind when making your decision.

The truth is, only your organization knows what is best for you. The important step is to fully understand your options and weigh them out accordingly.

The next time you’re looking to receive a proposal for your next technology solution, consider asking your Account Executive for a lease price, or a price for the Technology As a Service.

VIcom works with great financial partners that make leasing your technology simple and straightforward. If you’re interested in a leasing solution, please fill out the form below and we’ll be in contact!