asset purchase or leasing

[padey]

Hi all,

Does anyone have a (or has anyone here investigated) ‘asset purchase’ or leasing their camera equipment?

Is there some considerable saving for a business or is this just fools gold?

cheers,

[birddog114]

Hi all,

Does anyone have a (or has anyone here investigated) ‘asset purchase’ or leasing their camera equipment?

Is there some considerable saving for a business or is this just fools gold?

cheers,

Yes, no fools gold as you thought.
With leasing:
You don't have to outlay your capital and monthly payment as your rental with or without balloon/ residual.

[Mj]

Buy or lease. Depends on the deal... you gotta do the math...

Basically for a business:

You can buy, have an upfront capital purchase with depreciation to offset

You can lease, have no upfront capital outlay and payments are business operational expense, but as the owner will have a capital payment they will pass on the cost to you in the lease payment + profit.

Decision largely depends on lease repayment % and t&cs.

For small stuff like this I've generally found that lease is not attractive, but of course it depends on your own financial position and the amount of gear you'd be looking to lease.

[Glen]

Andrew,

I would say that it depends on depreciation, but for cameras asset purchase is probably not worth it.

For an item like a small computer system with $5k hardware and $5k software being purchased right now, I would suggest assett purchase as computers are depreciable at 33% per year and software 100% in year of purchase. So you would get to depreciate $5k + $1,666 in the year of purchase for the cost of 3 months payments. You can imagine I often help people structure invoices

Not so worthwhile on getting a 3 yr asset purchase on a camera which probably has something like a 33% depreciation (I don't know) as it is basically even.

On leasing it also depends on amounts, very small amounts can have prohibitive rates as mentioned by MJ. If you want to share the amounts I could be a bit more specific. Also sometimes you can bundle recently purchased equipment in, eg a few lenses, computer, printer, etc which may help with the rate.

[LOZ]

This is always a hard one and different articles have their pros and cons. For example we lease our delivery trucks as they are usually F#%@ed after 3 years and we just hand them back and start over again .

Our personal cars are purchased outright it is amazing what the savings are with cash .
.These company cars are driven carefully cleaned and maintained then after 3 years we hand them down to family members at trade in value which is about 25% lower than the car yards . This way we can see extra benefits or the purchase.
Australian tax laws are as water tight as a fishes ” a “ hole so don’t think that you can beat the system ..

[padey]

As far as figures go i'm looking at four 1Ds mkIIs on a three year deal. This will alow me to keep current.

But for the glass, i was thinking of buying them outright, as pro glass rarely changes.

[Glen]

Andrew, for those sort of amounts you are in the right range, you would probably be in the high sevens.

The question of buying the glass outright again probably relates more to depreciation and cash flow than anything else. I am not sure of the depreciation of glass (worth ringing your accountant or the tax dept, prime or diminishing method) but will use a desk as an example. From memory the depreciation rate is over 7-10 years for a desk, that being the useful life. If one bought $10k of desks, it would be better to take it over a 3 yr lease with $1 residual, rather than paying cash and taking ten years to claim depreciation. The small interest charge is far better than waiting ten years to claim one money back (especially when worked out with a Discounted Cash Flow analysis ie a $1 now is worth more than $1 in 10 yrs time)

[MHD]

Bloody Accountants!

[padey]

I've spoken to a few leasing companies, and here are some more definitive numbers;

3year lease on four 1Ds Mk2 for about $44 000, inc GST. Works out to be $1324 a month + a 10% residual at the end.

Or I can go for a 5year deal, $44 a month with a $1 residual.

I'll see my accountant in the next 10days or so. Then all I need to do is find 4 1Ds MkII's.

[Glen]

Or I can go for a 5year deal, $44 a month with a $1 residual.

I would normally suggest the three year, as that matches the working life of the item, but the five year is too good to go past I suspect it may be a mistype.

The three year deal sounds good. Look forward to seeing your images from the 1Ds MK11

[padey]

Or I can go for a 5year deal, $44 a month with a $1 residual.

I would normally suggest the three year, as that matches the working life of the item, but the five year is too good to go past I suspect it may be a mistype.

The three year deal sounds good. Look forward to seeing your images from the 1Ds MK11

Oh yes, $944 a month.

[Mj]

That's more like it... was about to type "GO FOR IT" and not wait for your accountant's view in the event you miss out on a deal like that

[padey]

That's more like it... was about to type "GO FOR IT" and not wait for your accountant's view in the event you miss out on a deal like that

Yeah, for $44 a month. I can tell you I wouldn't need an 'email from Canon' to take a deal like that. lol