Issue 6.15
People buy computers. Corporations lease computers. Why is that and should we be looking at other options?
There are a lot of things that go into decisions like this. The first is cost. Initially the lease costs less but long term value goes to the purchaser. For example, a $1000 computer would only cost you $40 or $50 per month if you lease it for three years – more if you lease it for two years and less if you can find a four year lease. In the long run however, you will pay more for the computer if you lease it and, you have to return it at the end of the lease – you don’t own it. This does not include leases in a rent to own system like Aarons or other companies like them. They charge you a weekly rent, but apply a percentage of that to the final purchase price (which is quite a bit higher than you could find buying it for cash). For businesses this often makes sense because it requires less money up front and they can consider the lease payments an operating expense for tax purposes. On the down side, they can’t usually write off depreciation on those same taxes.
The second consideration, and often the key reason businesses lease, is that you can upgrade your technology every two, three or four years. This hopefully keeps your employees as productive as possible and you don’t have to deal with most repair bills since most computers do not fail within the first four years from a hardware standpoint. For individuals, most like the option of upgrading when they want to instead of at the end of the lease. Some like a new computer every year and give their old one to relatives or sell them before they become obsolete. Most individuals, however, like to keep the computer until they feel it has outlived its usefulness or is too slow or limiting by current standards to continue with. That can often be five years or more. I have seen computers 8 years old still running reasonably well and reliably. Not often, but it does happen.
Businesses also like the reliable cost of leasing as opposed to having to purchase a truckload of computers all at once when the systems change (like last year when Windows XP was decertified or like what will happen in 2017 when Vista hits their end of life barrier.) By and large, there is a reason why businesses lease and individuals buy. People like me wish we could afford new tech every two years, but we know we can’t so we make the best purchase we can and then start looking for a good deal on a replacement about three or four years later. We keep our computers, handing them down to family and friends that can’t afford a new one or looking for someone who wants to buy our used items at a discount.
For people on a budget, you can pick up good deals on used equipment either from an individual who is selling their old gear to buy something new or from a dealer or discount house that sells off-lease equipment at a big discount. I routinely sell three year old off-lease computers for around $300 that were nearly $1000 new. They have been reformatted and refurbished with new operating systems and all old software removed. My experience has been that they are usually reliable and have quite a bit of life left in them.
For more information, contact me with the information below, and always remember to back up anything on your computer that is important to you.
Shaun McCausland has worked in the computer industry for over 33 years, 26 years of it locally with Bits ‘N’ Bytes and Musicomp and currently does in-home and on-site computer consultation, service, training and repair. If you have questions you can reach him at 435-668-7118 or shaun@musicomp.net.