Buying or Leasing a Snowcat: What Is the Best Option?
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Originally Posted On: https://skicatcompany.com/blog/buying-or-leasing-snowcat/
The winter months are finally here. Many activities require maintenance throughout the winter season. When it comes to the necessary heavy machinery, snowcats are an undisputed top option in the industry. They have a rich history of being top of their field in reliability and providing cutting-edge technology to bring their equipment to the next level. There is no job too large or small for a snowcat. The next important decision for you to make is buying vs leasing a snowcat.
Leasing is a great option for people or businesses that are looking to preserve capital and provide greater flexibility. There are several advantages to leasing, including:
Less expense upfront
One of the main advantages of leasing is that it allows you to obtain your equipment with minimal (if any) initial money down. This allows you to obtain the goods you need without significantly impacting your overall cash flow. You’ll only pay a rate that is subject to how long you require the equipment.
Equipment lease payments will usually be tax deductible for businesses. This helps to reduce the total cost of your lease.
When it comes to leasing, acquiring approval for the lease is often easier and comes with terms more flexible than those of loans needed for buying equipment. This is a great advantage for those who may have bad credit or would need to lower costs by negotiating a longer payment plan (which can cost you in more interest rates if you were to apply for a purchasing loan).
With any equipment, there is the inevitability of the technology becoming outdated. When you lease, you don’t have to worry about this happening to you. If a newer model becomes available, or you want to experiment with different attachments, you’ll simply select new options on your next lease.
Leasing can be a good option for business owners that have limited capital or need equipment that must be upgraded every few years. It is also a great option for those who aren’t looking for year-round equipment but want to use the best machinery possible.
There are some disadvantages associated with leasing, and these include:
Potential Higher Overall Cost
Leasing can ultimately be more expensive than buying the equipment you need outright. This can largely depend on how often you need to use the equipment, as well as the terms of the specific company that you lease through.
When you’re leasing, you don’t build the equity you could with owning it. Owning can be great because the equipment is yours outright, but that also means the responsibility of storage, maintenance, and repairs is also solely on you. But don’t forget about depreciation. Assets become less valuable the older and more wear they have on them. Many times with heavy equipment this can offset equity to the downside.
Obligation to Pay for the Entire Term
When you lease equipment, you have to make payments for the entire lease period. If for some reason you stop using the equipment, you’ll still need to make the payments. Some leases do give options to cancel, but there usually is some type of fee involved.
When it comes to leasing, the advantages outweigh the disadvantages. This is exceptionally clear when considering that you’re only looking to use the equipment through the winter months. Since snowcat equipment is expensive and seasonally based, leasing is the perfect way to get the job done and only worry about your equipment and costs when you have to use it.
Purchasing equipment can be a better option for an established business or for equipment that has a long usable life. When it comes to buying vs leasing a snowcat, advantages include:
Owning your equipment gives you ultimate control in when your equipment is used and what it is used for. You aren’t subjected to following specific time-frames or worrying about breaking leasing agreements. This is a good option if you have the cash flow, as well as if you are looking for equipment that is not likely to become outdated.
Potential Tax Incentives
Some may be able to deduct the cost of newly purchased assets in the first year through section 179. Even if you don’t qualify for this specific incentive, there is also the possibility of a depreciation deduction.
Ownership and potential tax incentives can be beneficial reasons to purchase your equipment outright. While these are great advantages, there are also several potential disadvantages, including:
Higher Initial Cost
When purchasing equipment, especially heavy machinery like snowcat options, you’ll have a lot of initial costs. Odds are, you will need to apply for a loan. This will require a down payment, as well as monthly payments. This may tie up your credit and often requires a lot of documentation and paperwork. You’ll also want to consider interest rates and overall expenses.
Ownership can be both a positive and a negative. You own the equipment, but that equipment will lose value every year. When it comes time to resell, you may not get much of your money back. You’ll also be “stuck” with your model in a sense, limiting your options to what you have versus what is currently considered the best.
While there are some great advantages to buying your equipment, there are also significant disadvantages. When considering seasonal equipment, you’ll have to determine if it is worth the year-round maintenance and cost.
Why You Should Consider Leasing Your Snowcat
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When it comes to buying vs leasing a snowcat truck, leasing tends to be the best option for most business owners. Leasing is a low-cost alternative to purchasing a new or used snowcat. When you lease a snowcat, you have exclusive use of the machinery for a set period. There are no upfront purchase costs. When you lease, you also don’t have to worry about costs of repair or maintenance. When leasing, you get a wide range of options, including PistenBully snowcats.
Your rate will be determined according to the length of time you need the equipment. Once your lease period is over, you simply return the equipment. Terms are always clear, ensuring there are no miscommunications or misconceptions of the process.
Benefits of Leasing a Snowcat
There are several benefits to leasing a snowcat. These benefits include:
No Upfront Cost of Purchase
Purchasing heavy equipment outright is expensive, and not everyone has that kind of capital or they can put their capital to work elsewhere where it can appreciate rather than depreciate in an asset. When you lease, you are only paying when you need the equipment. Leasing terms and fees are usually cheaper than monthly payments due on loans and other means of credit.
The moment you buy something, it already starts to depreciate. Each year, your snowcat would decrease in value. If you ever decided to sell your snowcat, the resale value may not be that high.
When you lease a snowcat, you don’t have to worry about scheduled maintenance or component service life costs. Snowcats of any brand, model or age are not cheap to service or maintain. If you aren’t familiar with repairs, odds are you’ll have to hire a specialist to make any necessary repairs.
Snowcats are known for their ever-evolving machinery that continues to improve to stay current with the latest technology. By leasing, you’ll always have the option of using the latest in top technology. When you lease, you can also use a variety of different configurations or attachments for a low cost. Some of your many options include:
This is one of the most powerful and versatile snowcats that easily meets the needs of contractors, utilities, backcountry guides, Nordic Ski Clubs, and cabin owners. When you lease a PistenBully 100, you are working with top-of-the-line snow equipment. It is easily transportable and performs well in all snow conditions. It comes with multiple options for configurations, making it customizable to fit your needs.Attachments
When you buy your machinery, you also need to consider having to purchase different configurations and attachments for your machine. When you lease, these items are readily available to you. This allows you the freedom to experiment with what works best for your needs. This could include different track options, such as combined aluminum steel tracks, or X-track. There are also different blade options and track setters. You also have a selection of different passenger cabins. This means that, as your needs change, through leasing, your machinery can change with you.
No Lending or Debt Issues
You don’t have to worry about the documentation and income scrutiny that comes with securing a loan to purchase expensive equipment. You’ll work directly with the Ski Cat team to determine what leasing option is best for your needs.
Perfect for Seasonal Use
For many businesses, the use of a snowcat machine is a necessity, but one that doesn’t last year-round. When you purchase a snowcat, you are responsible for storage and year-round costs for something you don’t use year-round. If your needs are strictly seasonal, leasing is the best route to take. You’ll only be responsible for the equipment over the term of your lease. Once you don’t need the equipment, it is no longer a concern, as it will be returned to Ski Cat until you need it again.
Leasing Your SnowCat
When it comes to buying vs leasing a snowcat, leasing often wins. This option comes down to the financial bottom line. Leasing is a great option due to the seasonal necessity of this equipment.
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When you lease through Ski Cat Company, you are only responsible for paying for the equipment during its actual use. Also, loan payments are deductible, saving you in net costs. Once your term is up, you simply return the machinery. This saves you from expensive up-front costs as well as any maintenance costs.
Contact Ski Cat Company to Learn More About Your Options
By leasing, you don’t have to worry about depreciation. You’ll have several different options when it comes to equipment and accessories. This provides greater freedom in selecting exactly what you need. Leasing is the perfect option for obtaining necessary winter equipment.
Contact us to learn more about leasing a snowcat.