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Computer Hardware: buy or lease?

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  • 22-03-2004 11:27pm
    #1
    Merrion
    Registered Users Posts: 1,421 ✭✭✭


    Anybody here lease their personal/small business hardware?

    I'm looking to get a fairly meaty server for some SQL server dev work and would like to know whether it is better to buy or lease.


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    #2
    Willie Wally
    Closed Accounts Posts: 13 ✭Willie Wally


    Depends,

    If you Buy
    1. You pay up front and put a €x hole in your cash flow
    2. You write it off against this years profits

    If you Lease
    1. You spread the payments but pay more over the life of the server
    2. You write the lease off against profits for the life of the lease

    It depends on your circumstances, are you a company? will you make much profit this year, next year and the year after. Most accountants say lease as it make it easier from a cash flow point of view


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    #3
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    A leasing agreement may also allow you to upgrade cheaply after a certain amount of time.

    So if you envision that you'll be needing (and buying) the latest hardware, every 12-18 months, you might find a leasing agreement cheaper.


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    #4
    Victor
    Registered Users Posts: 78,371 ✭✭✭✭Victor


    Originally posted by Willie Wally
    If you Buy
    1. You pay up front and put a €x hole in your cash flow
    2. You write it off against this years profits

    If you Lease
    1. You spread the payments but pay more over the life of the server
    2. You write the lease off against profits for the life of the lease
    Not quite.

    If you buy, it would probably be considered capital expenditure (unless you could somehow argue it is stock in trade) so you would probably end up writing it off tax wise over 5(?) years. If you are currently losing money this is an advantage.

    If you lease, it would only be for the period of the lease and be considered current expenditure.

    Woodchester Finance and similar do lease to buy arrangements where you pay them the lease over 1-2 years, write it off as current expenditure and buy for a nominal €1 at the end of the lease.

    Most computer last 3.5 years - how long will your server last?


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