The fact that most people do not carefully read their equipment leasing contract and negotiate it before signing makes them vulnerable to signing bogus deals that could end up being extremely costly.
The problem with most folks when it comes to a leasing equipment contract is that they sign them way too quickly barely after reading through. In the end they find out when it is too late that they have been trapped into signing a bogus deal. At best they end up with a deal that only favors the leasing company and leaves them with countless pitfalls.
Carefully reading and negotiating a leasing equipment contract has been known to save people thousands of dollars. In one recent case somebody saved themselves over $14,000 in just one lease contract! You too can save yourself a lot of money and avoid signing bogus deals.
You certainly owe it to yourself to go through every leasing contract with a fine tooth-comb and then negotiate as much as you can. You needn’t worry too much about upsetting the leasing company into cancelling the deal because competition amongst them is currently so stiff that they are unlikely to ever consider losing you as a client.
Signs You Have A Bogus Leasing Equipment Contract
Look Out For The Never-ending Lease
Never-ending leases come in many disguises all designed to trap you into a corner you can never get out of without paying a heavy price.
The best way to avoid this in most instances apart from reading your contract carefully and asking questions is to opt for the $1 buyout. This keeps it simple because at the end of the lease you only pay $1 and you own the equipment. Options to purchase at fair market value is something you need to avoid because after a few years placing a value on your used machines is extremely difficult and you will be at the mercy of the leasing company because they can easily corner you into paying anything they fancy.
The Automatic Renewals Pit
Automatic renewals always seem to lock people into an extension where they keep paying even after the lease period has run out, just because they did not put in some notice at the specified period. Make sure you carefully read the terms and conditions for the termination of the lease. Negotiate for a shorter period for automatic renewals, if possible right down to a month-to-month renewal. Also be very careful about the different notification deadlines required.
Too Busy To Do Your Sums?
The difference has been known to be hundreds of dollars per month in payments saved for those who have taken the trouble to do their sums and negotiate based on the current market prices of the equipment. If you are too busy to find time to read the leasing contract before you sign then reading this article may be giving you an idea of how much it may be costing you.
The Maintenance Devil
Is your maintenance extra or part of the hefty monthly payment? It will interest you to know that many of those who negotiate have managed to get full maintenance as part of the monthly payment for a wide range of different leased equipment. Naturally it depends on what kind of equipment we are talking about and how heavy maintenance typically is for it.
Beware; Notification Requirements
All agreements give detailed notification requirements at the end of the lease. Look out for contracts that have clauses for long periods of automatic renewal if the company does not hear from you at the specified time. It could cost you thousands of dollars in extra unnecessary payments. Never wait for the end of the lease to give notice. Remember that many leases need you to send your written notification 90-120 days before the end of the lease.
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Also be careful about your insurance. You are supposed to send the lessor proof that the leased equipment has been insured. Failure to do this on time will cause the company to get the insurance on your behalf usually at a very hefty price plus fees for this service. The time you need to do this may be way too short in a bogus contract.
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