Right after buying farmland, the most expensive investment is equipment. With it being so expensive, the big question is whether it’s worth to buy it or lease it. The reality is that it depends on each person’s situation. Here is a simple guide to determine whether to lease or buy farm equipment.
The reason buying is so common in farming equipment is Canadian farmers are used to it. Leasing equipment – let alone farming equipment – is still relatively new. Going back to tradition, people feel comfort from ownership and avoiding contracts when it comes to equipment.
Paired with leasing – which in its nature has particular conditions and other complications – it makes sense why people are hesitant to embrace leasing farming equipment.
As mentioned before, each one has its merits and downsides. The deciding factor is people’s situation and how a lease or a purchase of equipment will affect them. There are several factors to consider when picking between the two options. Some are:
With all these considerations in mind, one consideration farmers can make is a combination of the two – choosing to lease some equipment and buy others. These can be ideal for farmers in situations where a lot of maintenances is needed – such as sprayers. Ensuring the cost is covered by someone else while keeping new equipment for a period of time is a sensible idea.
Farmland is expensive, but what’s more crucial is the equipment that’s used on that land. Farmers’ decisions matter and it all starts with whether to purchase equipment outright or to have it leased. There are several factors involved, but when farmers make the necessary considerations and apply them to their unique situation, a solution will present itself.
Get started leasing or financing the equipment you need. Contact Yellowhead Equipment Finance today to get started. We’ll help you identify your eligibility, work with you to understand your options, and work with appropriate lenders to get the best solutions for your financing needs.