Does anybody lease vending machines?

[Vend And Glow]

Hi Guys just wondering if it is common practice to lease vending machines?

I see most people seem to buy them but i was wondering if anybody actaully leases?

I can imagine it may have tax benefits?

Saw another thread for spare parts where the guy said he thought the machines were going back to the leasing company?

Thanks

Lee

[Venderbase]

Hi Lee,
That would be me

Let me tell you my little story.
Vending Revolution convinced me that leasing vending machines was a great way to increase my business.
I took out a 5 year lease which they had already pre-approved with a leasing company.

Fast forward 5 years and out of the original 100 machines leased, I'd say a quarter of them had been stolen/lost over the years, yet I still had to pay the monthly fees.
In total I've paid double what they originally cost to buy.
Also, about half of them are knackered because the coin mechs where cheaply made.
I was just counting down the months for the lease to end.

When the lease ended, the lease company where insisting that 100 machines where returned to them in full working order or I could pay them £700 to keep them (almost 10% of the original purchase price!)
I argued with them that they couldn't expect 5 year old machines to work like new!
The outcome was a discount and I ended up paying £480 to be done with it.
Hence trying to flog the machines to get a bit back.

Still want to lease? I'd drive in the opposite direction as quickly as possibly!
A leasing company would lease you a carpet if you wanted them to, it's a false economy.

[Coin Operated Group]

a lease is only the same as a loan as long as you stipulate you want ownership of goods at end of lease.

Leases are also easier to obtain than a loan as they are secured on the goods.

[PGBrew]

Daz,
Sorry to hear your story. With a lease it is important, just as it is for a loan to get a good interest rate. Profitable businesses, with a good track record through a major leasing company there's no problem in getting a decent rate. A lease is a fixed term contract, where you have to agree to maintain, insure the machines etc. which always belongs to the leasing company and it is up to you to replace lost or stolen goods. This is why leasing costs are fully tax deductable, you never own the goods. After the leasing period is over the best you can get is permanent use of the machines, for an additional fee.

I looked at leasing which Vending Revolution were promoting in 2007 and decided against it. Firstly the interest rate was extortionate, then there were conditions about the upkeep & maintenance and insurance of the machines and finally there was no mention that ownership would transfer to me on expiry of the lease, although I was assured of this verbally. Glad I stayed away.

[Coin Operated Group]

I have arranged a few leases and also arranged them for myself, you can usually agree to make a further 2 payments after the lease has expired for the purchase of goods.

Another option you have is to sell the equipment to a 3rd party (non family) after the lease has expired and then buy it back off them. Thats something finance companies wont normally tell you!!

The lease co then invoice the final amount (which is the outstanding balance) just done this on my van

[Venderbase]

Yes the final payment was 2 months payments.
For high value, insurable items it's fine, for cheap items that are practically consumables it's a bit of a con.
I even had the choice of putting the cost of a load of sites into the lease!!
How would they have asked for them back!

[Coin Operated Group]

How long was your lease over Daz?

[Venderbase]

5 years!!

[Coin Operated Group]

You werent paying £350 a month though were you? I meant the normal monthly rate x 2 would be to purchase machinery from lease company.

[Venderbase]

Yes, with the VAT, £330/month!