What are the advantages and disadvantages of leasing?
Leasing can overcome short-term, low-bid thinking. EcoSystem generates financial benefits over the life of a building, and leasing aligns costs with those benefits. Leasing through Lutron can: • Minimize cash outlay and preserve lines of credit. • Overcome short-term, low-bid thinking. • Provide the financial flexibility of fixed monthly payments. • Generate tax advantages for some firms (see below). • Offer some firms a lower cost of money than other options. The primary disadvantage of leasing is that the owner pays the cost of money over time. For example, a $500k lighting system might cost $670k in total lease payments over 5 years. Benefits Return to Top How do various parties benefit from leasing? • The owner (or user such as a school board) benefits from spreading the cost of an energy efficient lighting system over time, to align with the savings. • Architects and lighting designers benefit from the opportunity for a project to generate energy savings within a “first cost” budg
The advantages of leasing are lower monthly payments, more vehicle for less money, little or no cash outlay, preservation of capital, less sales tax based on the monthly payment not the purchase price, and possible tax benefits. The disadvantages are no equity or ownership in the vehicle, potential expense from early termination, and the possibility of lease end charges such as excess wear and tear or mileage.
