Rent to Own/Buy program?

[deere88]

PLease explain this. Is it a good idea or a bad one?

 

[Reuben]

PLease explain this. Is it a good idea or a bad one?

We purchase most of our equipment that way. We have it tailored to make it beneficial to us and then at the end of the lease buy it for one $. We started purchasing equipment that way per the recommendation of our accountant. More tax deductions.

 

[deere88]

so does it cost less in the long run? how long do you lease it for? doesnt the dealer make more off this process?

 

[Speedpup]

renting or buying will depend on how much use it will get. No sense buying a piece of equipment for it to sit in a yard. Rent it and return it and the rental cost is 100% shown as no profit. It cost money to maintain equipment and insure it even when not in use. I bought my Lulls new or with 50-400 hrs but have been using them all since 85, 86, 87, and 92. When paid off they are nicer to look at even all these years later. I maintain them well and they never let me down bar one breakdown that was 11,000 on the 92 machine.

I leased mine with a dollar payment at the end. The cost at the time was near or the same as a straight loan.

 

[deere88]

isnt there a program where you can rent something and if you like it or decide you need it the rent goes toward a down payment?

Also on these lease till buy for $1.....do you have to pay for insurance?

 

[d6peg]

Some of the places that I rented from in the past applied 80% of the rental cost to the purchase price if I decided to buy the machine.

 

[John C.]

Shop around at all your local dealers. They will be glad to put something on paper now days as all are real hungry. Once you get all the paper sit down and compare the offers.

Good Luck!

 

[joispoi]

There´s a tax savings if you go with rent to buy. Be very careful if you go this route, though. Some people get hammered by their insurance companies in these deals. You could save on taxes, but be out of pocket more because of insurance.

Look at it from every angle possible, no matter how trivial you think it might be. Who´s going to pay the property tax?

There are good deals to be made, just be sure that yours is one of them.

 

[D155]

At the Komatsu dealership I work at, Rental purchase is really only beneficial if you do it within 6 months. That way, 100% of your rental is applied towards the purchase price.

 

[CM1995]

First of all welcome to the Forums D155!

Who´s going to pay the property tax?

That is a very good point to bring up joispoi. Rentals and leases have property/rental tax attached to them. When working the deal, both parties up front need to know who is going to pay the tax.

I leased a 725 arctic in March of 2007. As property tax on equipment is always a year behind, I recieved a tax bill of $2700 for the 2007 year, payable this year. I did know up front and decided that I would pay the taxes instead of having them financed into the lease. My thoughts were I wouldn't pay interest on the tax, someone has to pay for it and Cat Financial won't carry the costs for free.

 

[D155]

Well thank you for the welcome. Just stumbled across this site the other day. I've been an operator for the last 12 years. Just recently went to work at a Komatsu dealership.