We are a nation of owners and possessors. The two most popular topics of conversation in the UK have to be the weather and property values.
In mainland Europe, most people rent their homes; quite happily and only become ‘owners’ when left a house by a family member. It’s a cultural thing and nothing wrong in that.
Owning a home or any property, as we tend to do in the UK, makes perfect sense. They generally grow in value, as long as we maintain them properly and we are building a ‘nest egg’ for the future or to pass on to our children.
Cars are the other things we in the UK tend to like to own. Personally, I don’t want to own a car. I need one for my job. Therefore, to me, it is simply a tool of my trade. I have to get to see my customers and a car makes that journey easier.
My last car was German built and came at a retail price of just over £42,000 – A huge a mount of money. I paid no deposit and leased the car over 3 years at a ‘rental’ of £550 per month. At the end of the three-year period I had paid out £19,800 – Less than half the retail price. Plus; the actual ‘book’ value of the car at the end of the three years was only £12,000.00!
So, had I bought it outright at the beginning, it would have cost me £30,000 to ‘own’ that car – Leasing it saved me over £10,000.
Dental equipment and handpieces are a necessary purchase for any dental practice. But as with cars, they loose value over their lifetime, so why try to ‘own’ them?
Here are some of the advantages of leasing or renting equipment for your practice:
In any business, having enough cash is vital. By leasing, or renting equipment, you are easing your cash flow.
The exact way the tax is treated on equipment you choose to finance will depend on the structure of the lease or hire purchase agreement, but in almost every case, the payments, the interest and the VAT can be offset against tax – Always speak to your accountant before signing up.
By leasing equipment over three or five years, you will always be in a position to step up to the latest innovations. As soon as you have finished one lease, you can easily upgrade to the latest piece of kit and not have to layout large amounts of cash. Just like I have done with my new car. The old one was due for it’s MOT so I handed it back and got a new one which came with a three year warranty and at a much lower monthly cost!
Many suppliers build in care, maintenance and warranty packages with equipment rental schemes. This means you have worry-free use of the equipment and the assurance that if it does go wrong it will be repaired or replaced at no extra cost to you.
The simple fact is, the only thing a business should really ever aspire to own is property. Property appreciates in value; equipment and cars depreciate, quickly!
Equipment is not an asset you need to own; you just need it to work for you, day-after-day. Just like your staff.