Q : Equipment leasing

[andrewparkar]

What is financing by leasing?

[Mega B]

Come on,no introduction or anything about you just straight into a question !!!

[mattnelson]

in my country (NZ) the finance by leasing for something like a computer is done through some company, pretty much you pay a monthly fee and at the end of the contract you can trade it in and get a better system and keep paying monthlys. or you can by the system for paying one extra month. however every customer differs and these deals often end up with you paying 2-3x the value of the good (although the company seems to have a bit of a monopoly in NZ). Maybe CC is the better option

[rubix]

Equipment leasing is no more than an alternative means to finance assets. A usual lease agreement will have equal monthly payments till the end of the contract, and will have a 10% buyout option, or $10 buyout option at the end. If you opt for the buyout, you in turn will own the equipment outright. If you do not, then you can return the equipment at the end of the term. Leasing does have some tax benefits (check your jurisdiction, as we are located in Canada)....and most governments treat leasing as a "rental". Governmental bodies typically allow you to write off your entire lease payment against your earnings. In contrast, a traditional finance contract will only allow you to write off the interest portion of the debt, with another small write off for the depreciation of the asset. In addition, you will also save money on the overall interest, as you do not pay the sales tax on the equipment up front in a lease agreement, you only pay the sales tax on the monthly payment, therefore you do not pay interest on the taxes as you do in a typical finance contract.