Better to Buy Used Equipment or to Lease?

If you are wondering if it may be a better idea to buy at auction or to lease the equipment you need, there are several things you should consider before you make your decision.  To start with you probably want to evaluate how much and for how long you will use the equipment as well as your company’s financial situation.  In many cases, purchasing good used equipment can be cheaper over the long run, and when you are done with it, you still own something of value to sell.

Leasing makes sense for equipment needs that are short term or if it is the type of equipment that requires frequent replacement as it wears out quickly or becomes obsolete.  Another advantage is you typically put up less money upfront, as most leasing agreements do not require a large down payment.  You can also take rentals as leasing expenses on your taxes, but you need to figure out if it outweighs the convenience and long term benefits of buying your own equipment.  And your own equipment can be depreciated over time on your taxes. 

Buying at auction is a perfect solution for heavy industrial or farm equipment and machinery as it typically has a long life span and does not become technologically outdated in a short period of time.  The best deals come down to condition, and the newer the equipment and the better the condition it is in, the more valuable it will be.  And keep in mind, even if you buy at auction, you generally can still finance it. 

If you are thinking of buying at auction, you may want to take part in some online auctions or attend a couple of live ones to get an idea of prices on the equipment and machinery you are interested in.   Keep in mind if you do plan to buy used that you will want to do your homework and find out everything you can about that equipment.

Rabin is an international company that specializes in creating liquidity for complex manufacturing facilities with idle or marginally productive assets.  Rabin’s operations include selling entire plants, multiple plant locations, or surplus individual items by auction or liquidation and much more.  Check out our reviews here.