LPRS Blog: Leasing911

One of the fun parts of negotiating leases is collecting the war stories. The negotiations often produce revealing and humorous moments.

Leasing companies are typically highly profitable businesses, and most companies which lease the equipment – lessees – believe that they are getting a sweetheart deal. Both things can’t be true and the fact is that most lessees pay more for leased equipment than they expect – or even realize. The typical lease versus buy analysis performed by lessees assumes that the only cost of leasing is the regular-term committed payments and does not include any additional costs. This view of equipment leasing is driven largely by the assumption that the lessee can and will return all of the leased gear on time at the end of lease with no additional costs. If that were so, most leases would always be a darn good deal. However, returning equipment is frequently much more difficult than expected leading to extensions and other costs.