Discussion, tips, pictures, reviews and peer to peer support for current and future owners of Belquette manufactured machines, including the MOD-1 DTG machine and the Flexi-Jet set series of printers.
I'm currently in the process of purchasing or leasing a Flexi-jet L model with accessories for a sales price of about $24000.I dont know if I should just try to buy the equipment or lease it.The leasing company has the payment at $600 a month for 5 years.That sounds high to me.What do you guys think? Also what are advantages of leasing versus purchase.Tahnks. RICK.
I just turned down a lease today. The interest rate is 14% the same as my credit cards. That seemed high. Then they wanted 10% at the end of the lease as a closing cost, another $2K. If I paid off early, I still had to pay the interest through the 60 months. If I put it on a credit card and pay it off early, I save all of the interest and the closing cost.
Know all of the conditions! In the end it is probably better if you can find another means of paying. Home equity loan is collateralized and therefore a lower rate. Can you get a line of credit on your house? That is lower interest and has the advantage of only charging interest when the money is actually being used by you. The only thing the lease has going for it is a tax advantage if you have a lot of profit to declare.
Since I had good credit, when I called the bank to raise the credit limit on my card they offered to send me a check that has a 6.99% rate for the first year (after paying 3% up front). Usually that is what people use to transfer dept from one card to another. Yes, I took it. Do you get checks with your credit card statement? It can be done that way too.
Did this make any sense?
Flexi is my dream machine. I am borrowing enough to get a Refurbished T-Jet. Good luck with your purchase.
I bought my HM1 on lease. I did a shorter term of 48 months and made sure it could be paid off early after the first year without any penalty. I also made sure my lease was assumable in case in a couple of years I decide to sell my machine or something, because you never know what can happen in the future. I also looked at alot of leasing companies and found one that had a $1 buyout at the end of the 48 months. The lease works for me because it gives me a good tax writeoff that I needed. You can find a good lease, you just have to look around to find the best, dont settle for the first company you talk to. It is amazing how they are willing to negotiate when they know you are looking at other companies as well. hope this helps.
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When deciding on leasing or other financing options there are many things to consider. If you are leasing for tax reasons - you need to make certain that the lease meets the guidlines set forth by the IRS to make it a true lease, I don't know all of these, but I pretty certain they include - the lease must be at least a 36 month term, it must have a FMV (fair marklet value) buyout (but can be stated not to exceed 10% - this may preclude a $1 out lease), and it cannot be bought out for the first 12 months (without a penalty and loss of tax advantage). Things to be wary of when considering a lease - is the purchase option at the end a "put" which means that you are required to exercise the purchase option or you will be in default, is it assumable, what penalties are their for early buyout and what is the likelyhood of your lease being "sold" to another financing company.
Ultimatley, the decision to lease on not to lease should be made by your tax advisor/accountant. Exposing your personal line of credit (i.e. - credit card or line of credit) or your home (i.e. - home equity line or second mortgage) can be risky and may make you more vunerable to being auduted by the IRS come tax time.
My advice - consult with your accountant before you buy to determine the best way to proceed.
Usually, when you think about a lease, you expect to pay less than the purchase price in lease payment. But with your lease quote, payments total $36,000 for a $24,000 machine! That sounds more like purchase terms to me.
Any down payment? One thing to watch for is what happens at the end of the lease? How do they recover the machine? Will you have to ship it back? Are there any other recovery fees?
Usually, when you think about a lease, you expect to pay less than the purchase price in lease payment. But with your lease quote, payments total $36,000 for a $24,000 machine! That sounds more like purchase terms to me.
Any down payment? One thing to watch for is what happens at the end of the lease? How do they recover the machine? Will you have to ship it back? Are there any other recovery fees?
What you're describing is more of a car lease, where your payments are less because you will be returning the car at the end of a lease. At the end of that type of lease you do not own anything. A commercial lease, for a digital printer in this case, is really more of a financing device to own the machine at the end of the lease. You, in most cases, put down the first and last months payment, pay monthly, and at the end of the lease pay an additional 10% of the purchase price and now own the printer.
Leasing, in general, is a more expensive option then other financing methods (low rate credit card, bank loan). But there are certain tax savings which might make it the cheapest financing for you. As Don wrote, your accountant is the best judge of which way is the best for you to go.
What you're describing is more of a car lease, where your payments are less because you will be returning the car at the end of a lease. At the end of that type of lease you do not own anything. A commercial lease, for a digital printer in this case, is really more of a financing device to own the machine at the end of the lease. You, in most cases, put down the first and last months payment, pay monthly, and at the end of the lease pay an additional 10% of the purchase price and now own the printer.
I was thinking back to my office days when I leased one of those over-priced, 500 pound copy machines. I remember being responsible for getting the machine back to the leasing company after the lease was over. I think I had to hire a moving company to get it shipped back!
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Originally Posted by rickcaspari
I'm currently in the process of purchasing or leasing a Flexi-jet L model with accessories for a sales price of about $24000.I dont know if I should just try to buy the equipment or lease it.The leasing company has the payment at $600 a month for 5 years.That sounds high to me.What do you guys think? Also what are advantages of leasing versus purchase.Tahnks. RICK.
I just used a credit card calculator to see how much an 18% credit card would charge for $24,000. Guess what? Same payments and payoff term as your lease. May as well use your card and get miles or something.
If you can finance thru your local bank, that's the best bet. It helps build up a credit relationship with your bank, and the interest rate will probably be less. Also, most leasing companies are out of state, and somwtimes sell of their leases. As previous posts stated, do your homework, and check out several leasing companies. Also, if the mfg says "use our leasing company for a great deal", then probably the mfg is getting some type of commission from the leasing co. that you will pay for in the end. We leased an embroidery machine once, and paid the sales tax on the equipment which was included in the lease payments, then wound up paying sales tax again on the value of each lease payment. Also, the leasing company sold off our lease to another financial company, and we had a dispute over the 2 advance payments that the orginial leasing company never gave us credit for when they sold the lease off. We had to spend money for an attorney that cost us more than the 2 payments.
Read all the fine print, and have someone else such as your accountant or attorney read it also before you sign.
I chose to buy my flexi because I will depriciate it over 2 years.
If you take a 5 year lease, you must depriciate it over 5 years.
So $24k over 5 years is a little under $5k a year for tax purposes.
The way the dtg market is, I will probably buy another dtg in 2 years anyways.
I talked it over with my bank and they are saying that I can finance through them and get my payment for around $500 for 5 years, so I submitted a credit app and am waiting for the banks reply.Thanks for all you guys advice.RICK.
Flexi_jet lease question? 
