Leasing Office Equipment - Why It Makes No SenseOne of the most common sources of administrative cost abuse comes in the form of lease contracts for common office equipment. Frankly, the advantages of leasing for any company other than the smallest of organizations, those without access to capital, are almost non-existent; and this includes tax benefits. And while large organizations may wish to lease to avoid depreciation and capital budgeting approvals, the surprise or hidden costs of entering into a lease can easily nullify any benefits accruing from circumventing corporate procedures. The following is a list of reasons why leasing should be an organization's last recourse; don't forget that needed funds can often be secured through banking institutions with straight-forward repayment terms.
Interest rates are considerably higher with leases, as opposed to bank borrowing.
Because lease rates are not controlled, and are often not clearly stated in a contract, there exists an opportunity for the sales representative to build in extra costs which affect the lease payment.
The funds for leased equipment often come from a capital lending company, which separately bumps up the payment amount (a tactic referred to as overfunding) and then kicks back something to the equipment provider.
Lease contracts will frequently include separate additional charges of 3-8% for property insurance, which is normally covered automatically in a standard business property insurance policy. These charges can be eliminated by providing proof to the leasing company of such insurance coverage.
Lease contracts often require the customer to provide notice within 90 days (and up to 180 days) of their intentions to terminate the lease. If the customer fails to do so, the leasing company can renew the lease for another twelve months and the customer is stuck. In addition, the requirements may include a provision that the termination notice be delivered by certified mail, but only a P.O. Box number is supplied as the recipient address, making the certification impossible!
If the customer attempts to terminate a lease prematurely, they may be surprised to find that the rules will not provide for payout of the term of the lease unless the lessee commits to purchasing the equipment at 20-40% of original equipment cost.
As the typical bill for leased equipment does not clarify that the lessee has paid, for example, 48 of 60 months, customers continue to pay in response to delivered invoices as they are unaware that the lease term has expired.
Verify invoices! Often times a lease contract may provide for a payment of, for example, $200/month, but the monthly bill requests a payment of $240.
Watch the fine print! Many lease contracts will stipulate that at the end of the lease term, it is the lessee's obligation to ship the equipment to a destination of the lessor's choice and be responsible for shipping costs and liability for the equipment until it is received and accepted.
Due to increasing levels of questionable business practices in leasing, a dollar- buyout lease is the best way to determine and control total cost of ownership. If faced with no other recourse than to make a lease decision (have you checked with your bank?), secure the dollar-buyout variety, in which the lessee is automatically charged one dollar for the equipment at the end of the lease term.
The loyalty of leasing companies is to the vendor as opposed to the end user. Often there is no direct contact available through the leasing company; instead, customer communication can be limited solely to the vendor.
And this cannot be stressed enough - read all contract terms carefully and be sure you are in agreement with the terms. Furthermore, require that written clarifications be included in the lease from the vendor or lessor with respect to anything you don't completely understand.
A to Z of Indian Age of Authoritarian Democracy Communication Effect Communication Skills A Vehicle On The Road Corporate Governance Investing in the Emerging Daily Politics Blog How to Find Democracy at Its Best E Governance Election of the President of Pakistan Five Tips For the Best Queen Friendship and Politics Can They Mix Government Bids Top 10 Tips Government Contract Proposal Writing Tips Handle the Argumentative Communicator and Difficult How Ancient Greek Democracy Worked How Does a Bee Become the Queen If President Obama Were My Patient Ignoring Importance Of Communication Is A Direct Importance of an Effective Community Relations Introduction and Brief History Is President Obama Channeling President Richard Issues Which Are Plaguing Local Self Government In New Jersey Monkey Cage Democracy Moving to Queens New York O P Bhatnagar A Poet Perestroika and Democracy in Russia Political Discourse and Participatory Politics The Ugliest Fascination on Earth Post capitalist Free Market Economy President Barack Obama Must President Bush and Pyramid Numerology Problems In Managing Government Purim Why Did the Womanizer Queen Bee Rearing Queen Hatshepsut Egypts Queen Queen Honeybees Are Made Not Born Queens of Amsterdam Quest for Democracy in Ethiopia Secrets to Becoming a Master Serious Defects in Modern Democracy Seven American Presidents Have Uranus Six Myths of Effective Communication The 2008 Election Results Dysfunctional The Art of Communicating The Government GIP The History of Cornish Independence The Meaning Of Queen The Pope And The President The Role of Government The Significance of the Queen The Top Five US Presidents Top 10 US Presidents True Democracy US Government Sales Marketing US Presidents That Went to Harvard Understanding the Communication Process The Key to Organisational What Is The Best Suitable What is Political Science Where Now For European Why Workplace Politics Charts the Path
5 Major Benefits of Leasing A Basic Guide To Generating Revenue Apartment Property Management Audi Business Leasing Automated Recoveries Key Can Property Management Make a Finance Difference Commercial Agents Sales Presentation Commercial Property Management Commercial Property Contract Hire Information Do You Need Property Management Does Employee Leasing Make Sense Dubai Property Management Employee Leasing Lover Employment Leasing HR Management Expediter Truck Service Financial Analysis for Workplace Lease Five Considerations of Hiring Property For Property Management Jobs Freehold And Leasehold Property Government Bidding Glossary (pt 1 2) Green Car Scheme How Property Owners Benefit How To Break Apartment Lease How To Evaluate Management Software Importance of Lease Abstraction Internet Based Lease Accounting Is Pre-Pack Administration Right for Finance Lease Administration Software Lease Management Software Lease Or Get Property Lease Your Next Car or Fleet Leasing Office Equipment Leasing Software And Fleet Management Let The Property Management Do the Job Make Finding a Property Easier Make Finding a Property Management Company Make Property Management Effective Oklahoma City Property Management Companies Property Management Company for Business Property Management Fees Explained Property Management on the Rise Renegotiating a Commercial Lease Shopping for a Property Tenants Obligations Under Commercial Property The Best Atlanta Apartments The Evolution Of Property Top 9 Questions to Ask Uncover Which Property Management Jobs Waterloo Property Management What Is Staff Leasing What Type Of Property Owners Look For What You Will Get From Property Why It's Important to Get Property Why You Need Property Managers orleans Property Management Company Why You Should Hire Manager Workflow Automation In The Leasing Empirian property management - Law
© Riverside Property Management