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Lease or Own: Which is the Better Option for You?

by Lee Warren (LeeDubya) ‎01-14-2014 11:30 AM - edited ‎01-14-2014 11:32 AM

45392-3.jpgJanuary provides an opportunity for a fresh start. It’s a great time for machine owners to evaluate their business strategies, project schedules and existing equipment. Those ready to expand or update their fleets have some considerations to make before purchasing. Does it make more sense to lease or own the equipment? How do you know which financial solution best fits your situation? How can you be sure you've made the right choice? These are just a few of the questions to ask when making a purchase decision.


Equipment purchase considerations begin with ownership and leasing choices, which both have benefits and drawbacks. The key to making the right decision is being aware of all the options and considering how they’ll affect your individual situation.


Equipment Ownership

Customers can choose to finance or lease the equipment, but making a purchase from working capital or cash reserves may be better for acquiring equipment at the lowest cost. Service fees, finance charges and interest expenses are eliminated and ownership is immediate.


The biggest advantage to equipment ownership is depreciation, which can be listed as an income tax deduction allowing a taxpayer to recover the cost. It’s an annual allowance for the wear and tear, deterioration or obsolescence of the equipment.


Equipment Leasing

A properly structured lease can provide many financial advantages to the lessee. It can free working capital for other investments while not affecting the customer's borrowing power or line of credit. Lease payments may provide a tax deductible business expense, reducing tax liabilities. Customers have several leasing options; however, installment sales contracts (loans) provide financing options for customers not interested in leasing.


Finance Lease- a capital lease designed for customers who want the option to own at the end of the lease. This option provides the same tax benefits as ownership including equipment depreciation, lower payments and equity buildup.


Flex Lease- designed for customers who want a finance lease with the option to return equipment after a stated interval or prior to lease termination. Customers can return the equipment at lease-end, or they can exercise a final bargain purchase option.


Tax Lease- an operating lease that qualifies for off-balance-sheet financing and allows the lease holder to make the lowest possible payment. On the other hand, tax leases do not build equity and cannot be modified during the life of the contract. At the end of the lease, customers may purchase the equipment or return it.


For more information on these and other leasing options, visit us online.


How Do You Choose the Best Option?


Each applicant should take some time to assess finances, weigh options and meet with a dealer representative for consultation. Cat Financial offers some insurance and financing tools to help speed up the process.



Whether you’re just starting out or looking to expand your fleet, equipment purchase decisions are important. No two companies present the same situation, so it only makes sense that each company’s financial solution be different too. Take some time to explore your options and talk to a representative to choose the best option for you.


We’d like to hear about your leasing and financing experience.

  • Have you ever leased equipment?
    • If so, how was your experience?
    • If not, would you consider it in the future?
  • Did you find the online tools listed helpful?
  • How can Caterpillar help make the financing process easier?

by Hadiza on ‎04-29-2014 09:13 AM

 I have view your company profile today i think that we can exchanged business pictures. please you can write to me ( Ngonehadiza13@gmx.com ) not in this site because i am a new in this community and i don't visit this site often,
i will get back to you immediately with the requirement you may need

by Lee Warren (LeeDubya) on ‎04-30-2014 12:26 PM



Thanks for viewing the blog and for your interest in Caterpilllar and CAT Financial.  This forum was developed to facilitate and promote online discussion for a wide range of Caterpillar questions and issues.  The intended discussion also helps other viewers and moderators gain knowledge and/or contribute with their expertise.  Please post your question(s) within the settings of this forum and I'll answer it as soon as possible.  Again, thanks for your interest in Caterpillar.



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About the Author
  • I am a Marketing Communications Specialist for Caterpillar with over twelve years of experience marketing the Cat brand to customers in Latin and North America. My goal is to arm customers with the information needed to make well informed purchase decisions; to maximize the value of Cat machines by using an array of Cat Work Tool attachments; and to minimize the total cost of ownership by using Cat parts and Cat Dealer service.
  • I am an expert Operator and Application Specialist for Caterpillar concentrating on products used in the construction trades industry. I operate, evaluate and train on Cat machines and Work Tool Attachments worldwide. I have a Degree in Agricultural Engineering, Craftsman Certified and was named Apprentice of the Year 1981 at the University of East Anglia, UK.
  • I am the National Association Manager for Caterpillar and have responsibility for customer associations and partnerships in multiple industries for Caterpillar. I have 12 years of experience at Caterpillar, and have spent most of those years in the field with dealers and customers around North America. I have always had a passion for equipment and find myself fortunate to be able to work with dealers and customers almost every day.
  • I am a Sales Support Manager for Cat Financial and have responsibility for ensuring that the right financial products are available to Cat customers who purchase, lease or rent to own. 8 of my 10 years with Caterpillar Financial have allowed customer and/or dealer interaction as part of my daily responsibilities including over 3.5 years as a Territory Manager. I take personal satisfaction in finding financial solutions that work for our customers and CAT dealers.
  • I am a Product and Application Specialist with over 35 years experience at Caterpillar. I focus on helping you to determine the best Cat machines, work tool attachments, and services for you to use in the building and general construction, landscaping, specialty trades, and agricultural industries.
  • I am a Filter and Fluid Marketing Consultant with over 14 years experience working at Caterpillar. My focus is to ensure customers understand the importance of using superior filtration and lubrication products in their equipment.

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