Lease vs. buy: Making the right decision
At VENDY1, we offer you both the option to buy vending machines and the option to lease them. In this blog post, we'll help you make an informed decision about which of these two options best suits your needs.
Leasing and purchasing at a glance:
Leasing: Leasing is a flexible form of financing in which assets can be used without having to buy them. The lessee makes a monthly or quarterly payment to the lessor - the leasing installments. These leasing installments mean that the asset is leased for a predetermined period and can then be bought out or leased on at the end of this period.
Purchase: In contrast to leasing, with a purchase you immediately acquire ownership of the purchased item as soon as the full amount has been paid. There are no ongoing liabilities to a leasing company. However, a one-off, often large investment is required to acquire the purchased item.
Advantages and disadvantages of leasing
- Liquidity is maintained
- Larger purchases possible even with a limited budget
- Costs can be planned
- Flexibility -> At the end of the leasing period, you can switch to a more modern/better device
- Tax advantages
- Higher total costs than when buying
- No ownership
- Contractual commitment -> Leasing contract cannot usually be terminated prematurely
Advantages and disadvantages of the purchase
Advantages:
- Full ownership
- Cost savings compared to leasing
- Flexibility -> machine can be resold at any time
- Investment in assets -> purchased vending machines count as fixed assets and can be capitalized in the balance sheet
- Depreciation possible
- High initial investment
- Capital tied up
- Depreciation -> machine loses value over time
Sample calculation for comparison
Vending machine used: Large snack/drink combination with lift and small display (UD10316)
Purchase:
Price of the vending machine: €4,200
Shipping: 300€
Total cost: €4,500
Leasing:
Leasing period: 24 months
Monthly leasing rate: 210.42€
Shipping: 300€
Total costs: 210,42€*24 + 300€ = 5.350,08
Leasing or buying - which is better?
Whether leasing or buying is better for you depends on various factors. The basic question is whether you want to become the owner of the machine immediately or not. You also need to be aware that leasing naturally incurs higher costs overall, as the leasing bank also has to earn money from the lease.
If you already run a successful business and have sufficient capital, you can consider both the classic purchase and leasing. Which of the two is more suitable for you depends on your philosophy or your plan with the vending machine. If you only want to operate a vending machine on a trial basis or are unsure whether you can be successful with the machine, buying would be preferable, as you can then simply sell the machine on if necessary. However, if you don't want to invest several thousand euros straight away and are sure that you want to operate the vending machine in the long term, leasing is the better choice.
If you are just starting out on your own or would like to set up a vending machine business (perhaps even on the side), we would recommend leasing. With a good installation location and attractive products in your vending machine, you can easily pay the leasing installments from the profits from operating the vending machine.
Feel free to contact us for a personal consultation to find out what we would advise you to do.