Financing used equipment is a great option for many companies. However, are there any other options that they could use?
When it comes to financing equipment, you can opt to lease either refurbished, new or re-manufactured equipment. All these terms might be confusing for many people, which is why they shall all be clarified here. Not knowing the difference makes it difficult to accurately compare lease quotes and rates. You can easily alleviate this confusion by becoming a more informed customer.
Difference Between New, Refurbished, Used And Re-manufactured Equipment
New equipment refers to equipment that has not yet been used. This type of equipment usually comes from an authorized channel such as a leasing company or a dealer. The manufacturer’s warranty is still effective.
Unused or factory equipment is equipment that has not yet been used but is distributed by an unauthorized channel. An unauthorized channel here might sound like a big deal but it is actually distribution of equipment through the manufacturer’s representatives. You can make a cash purchase at 50-60% off the list price but there is a high chance the existing warranty won’t be transferred. The manufacturer will however be happy to sell to you a maintenance contract.
Re-manufactured equipment is actually used equipment that has been refurbished by the manufacturer himself. In this case, the manufacturer updated, audited and tested the equipment.
Refurbished equipment is used equipment that has been updated, audited and tested by a third party and not the manufacturer. For instance, if it a computer, the refurbishing process may include updating the OS to the latest version including drivers and patches. You can purchase refurbished equipment at 60-90% off the price list.
Used equipment is just as the name suggests; equipment that has been used. It does not have any updates or testing done on it.
Should You Consider Financing Used Equipment Or Refurbished/Re-manufactured Equipment?
Financing used equipment has its pros and cons and so does financing refurbished/re-manufactured equipment. Pre-owned or used equipment is cost effective. You can get the latest model of used equipment at a cheaper price than a refurbished one. It is even much easier to negotiate for a lower rate. Most leasing companies are open to price negotiations on used equipment.
One disadvantage of financing used equipment is that you do not know how the previous owner maintained it. you could finance it and end up spending tons of money repairing it. the equipment might not have the manufacturer’s warranty so if something breaks or malfunctions, it is up to you to replace it unless your lease agreement states otherwise.
Refurbished equipment on the other hand is much more costly to finance than used equipment. This because it is equipment that has been updated with the latest software, spare parts, etc. Since manufacturers are not allowed to pass off refurbished equipment as new equipment, they sell it at a cheaper price to the lessor. This way, the lessor will be able to lease to you the equipment at a much lower rate.
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Final Say On Financing Used Equipment
Financing used equipment is much cheaper than financing refurbished/re-manufactured equipment but chances are that you may acquire equipment that does not meet quality standards. Thankfully, there is a way that you can avoid all this by simply searching for a reputable leasing company.
You can choose the type of used equipment you want by communicating your needs to your lessor. For instance, if you want to lease a used MRI machine, you can request your lessor to provide you with equipment that has not been used for more than a year.
Before financing used equipment, ensure that you test it before signing your contract or going anywhere with it. When you carry the equipment with you, it would be almost impossible to convince your lessor that the equipment was faulty to begin with.
If you are looking for real lenders to offer you free quotes on used equipments, then you should visit LeaseQ. They are a leading source of credible finance companies. You can get a free quote in less than two minutes. Financing used equipment no longer has to be a hassle because you can use their lease calculator to know how much you will be paying per month.
For more information on financing used equipment, simply CLICK HERE.