Does Leasing Your CAD Hardware Make Sense?
Leasing IT equipment has been common for more than 50 years. The benefits of leasing include reducing the capital needs of IT, reducing the expense line, the ability to include maintenance contracts in the monthly fee, and a few others. However, it’s been far less common to lease CAD workstations, even as more vendors offer the option.
The leasing option needs more consideration, especially as the demands for new capabilities and improved performance continue their relentless march forward. Yet, it’s not a slam dunk decision and you should consider some of the key criteria in your decision process before you decide on one acquisition method or the other. Here are a few of the key issues that will impact your decision.
The Length of the Lease is Important
One of the realities that you will face on an IT equipment lease is that the depreciation of nearly all IT devices occurs very rapidly, in the first 2-3 years. This means that if you want a short term lease, so that you can upgrade quickly, the lease rates may be a bit higher than for a longer term lease. When we look at CAD workstations in particular, this shorter term lease may be attractive as it will allow you to refresh your equipment and get the latest products the most quickly. If you are already upgrading every 24-30 months, you need to plan the lease accordingly.
The Benefits of Known Hardware Costs
Depending on your organization, one of the leasing benefits that might be most attractive is the ability to bundle all the workstation costs (system, peripherals, maintenance, and support) into a single monthly fee through the leasing company. This provides true cost certainty, and for some organizations, this is very attractive. In the case of a major out-of-warranty failure, the comprehensive lease can mitigate any large and unexpected expenses. Some leasing firms will actually build a program that automatically refreshes the hardware every two years for a known monthly cost with no upfront fees. Sort of a “drive a new workstation every two years” kind of deal!
Not All Leasing Options Are the Same
The last point I’d like to touch on with this blog is to make sure any potential lessee realizes that there are often substantial price differences between your leasing options. Depending on what different services you want on the lease, you may find that the hardware vendor offers far better pricing, or you can work with a third party that can bring the services. This is all unique to each transaction, and demands some research and shopping on your part to get the right lease.
Some of you may already be leasing IT equipment, and spreading this practice to include CAD workstations may make good financial sense. It may also allow you to get more services and do more frequent refreshes of your hardware, without substantial impact on your financials. And if your organization is really watching how they spend their capital, leasing may give you much more flexibility for new system acquisition than would otherwise be the case.