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Key Advantages to Leasing

6 Mar, 2008 By: Kevin Reese of US Bank Office Equipment imageSource

Key Advantages to Leasing

When considering leasing, there are many benefits to the dealer and
customer. For a dealer, leasing will assist in overcoming price objections. A
customer will enjoy the flexibility that leasing provides. The question is who
benefits more?

A leasing program has definite advantages on both sides of the contract.
Leasing provides greater flexibility for both dealers and their customers. This
flexibility is further enhanced through the successful execution of a bundling

Advantages for the Dealer

An effectively implemented leasing program can provide a multitude of
benefits for a dealer. When a dealer offers a leasing option, they will receive
their payment in full upon confirmation of installation. They also have the
ability to sell to a customer’s operating budget. This makes it easier for a
customer to avoid the overhead that is associated with the outright purchase of
an asset. When selling to an operating budget, it is also possible to increase
the sale as they are agreeing on a payment rather than the equipment’s price.

When leasing, a dealer acts as a consultant in the sales process. Leasing
provides flexibility to supplement a contract with additional equipment or
services. In time, a dealer is also able to approach a customer regarding
upgrading their equipment.

This approach will not only increase the sale, but has the potential for
further customer retention.

Advantages for the Customer

Leasing is not only advantageous to the dealer, but provides many benefits to
the customer as well. Many of the advantages are in the financial capacity. The
most prominent is that they preserve credit lines and working capital. Since a
lease doesn’t affect the customer’s borrowing limits, it keeps 100% of their
credit available for other needs as well as preventing their cash from being
tied up in overhead. In most cases, the monthly payments may be fully deductible
as operating expenses rather than accounting for the equipment as an asset.

In addition to financial benefits, leasing also allows the freedom to upgrade
the equipment that the customer is financing. This will help hedge the
inevitable obsolescence of the equipment. Because upgrading a lease is so easy,
the most modern equipment is always available.

Advantages of Bundling

When considering implementing a leasing program, it is advisable to consider
integrating a bundling program. The option to bundle equipment with a service
contract has definite benefits that impacts both the dealer and its customers.

A dealer that bundles has the ability to differentiate themselves from their
competition by becoming a “One Solution Provider.” The dealer essentially
becomes the customer’s print output consultant—in turn, securing the customer
through a service contract. The service contract should include annual
escalations to help the dealer manage increasing costs associated with servicing
the equipment.

When your customers sign a lease contract that implements a bundling program,
they will also enjoy the many benefits that bundling provides. Rather than
purchasing depreciating equipment, your customers are simply paying for pages.
With monthly allowances and overage rates, the output costs can be monitored
easily and accurately. The customers’ administrative burden is further
diminished by receiving a single invoice.

Among companies to consider, U.S. Bank Office Equipment Finance Service has a
proven track record of creating customized financing and bundling programs for dealerships. Bottom line?
Creating strong, enduring and profitable customer relationships. It’s Your
Customer. Your Future.

-Courtesy of U.S. Bank -Office Equip. Finance Service Contact

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