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Understanding Different Leasing Options and Their Advantages

Jun. 20 2023 Buying Guide By Quality Forklift Sales and Service

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When it comes to acquiring equipment for your business, leasing can be a viable option that offers flexibility and financial benefits. With various leasing options available, it's essential to understand the differences to make an informed decision. In this blog post, we will discuss three popular lease options - Buyout Lease, Walk-Away Lease, and FMV Walk-Away Lease - and their advantages.

1. Buyout Lease

A Buyout Lease is a type of lease that allows the lessee to own the leased equipment at the end of the lease term. This option is ideal for businesses that plan to use the equipment for an extended period and eventually want to own it.

Advantages:

  • Ownership: At the end of the lease term, the lessee has the option to purchase the equipment, making it an attractive option for long-term investments.
  • Tax Benefits: Depending on your local tax regulations, you may be able to claim tax deductions on the lease payments, reducing your overall tax liability.

2. FMV (Fair Market Value) Walk-Away Lease

A Walk-Away Lease is a lease agreement where the lessee makes a set monthly payment for a specified lease term. At the end of the term, the lessee has the option to return the equipment, buy it out, or lease it again.

Advantages:

  • Tax Benefits: Similar to Buyout Leases, you may be eligible for tax write-offs on lease payments, depending on your local tax laws.
  • Lower Monthly Payments: Walk-Away Leases often have lower monthly payments compared to purchasing equipment outright or opting for a Buyout Lease.
  • Flexibility: At the end of the lease term, you have the option to return the equipment, purchase it, or lease it again, providing more flexibility based on your changing business needs.

3. FMV (Fair Market Value) Walk-Away Lease with Full Maintenance

An FMV Walk-Away Lease is similar to a Walk-Away Lease, with the added benefit of a service contract included in the lease agreement. This means that maintenance costs are covered during the lease term, eliminating any unexpected expenses. As a helpful reminder, abuse and customer damage are not included.

Advantages:

  • Maintenance Included: With a service contract as part of the lease, you don't have to worry about additional maintenance costs during the lease term.
  • Tax Benefits: As with other lease options, you may be eligible for tax write-offs on lease payments.
  • Lower Monthly Payments: FMV Walk-Away Leases offer lower monthly payments, making it more affordable for businesses to acquire the equipment they need.
  • Flexibility: At the end of the lease term, you have the option to return the equipment, buy it out, or lease it again, providing flexibility to adapt to your business's evolving requirements.

In conclusion, selecting the right leasing option can significantly impact your business's success and growth. By understanding the advantages of each lease type, you can make an informed decision that suits your needs. To explore forklift leasing options tailored to your business, visit Quality Forklift and let our experienced team help you find the perfect solution.