Leasing a little heads up.

Well we all understand the benefits of leasing but....
One of the areas which suppliers use to "Hide" Margin or profit is within the leasing.There are a host of ways suppliers will "hide" Profit
Heres an example
You order £50,000 of hardware on a lease to upgrade your old copiers.
You are 3.5 years into a 5 year contract
The settlement of your old copiers is £21,000
You have negotiated a really good price for your £50,000 hardware, you got 3 proposals etc etc

Do you realise that your supplier makes between 2.5% and 15% margin on the leasing? 7% approx is pretty standard
So 7% of £71,000 is ? £4,970

That doesn't even include the Margin on the Hardware or services or service contract.

Thats one very simple example of how profit can be created.

Whats more they arn't making £4,970 because of a product or service they have offered you.

They provide the leasing directly for a number of reasons.
1) It improves their cashflow as they get paid within 48hrs of installation
2) They get title to the equipment when its contract is settled or expires
3) They (Usually the Dealership owners) get a very healthy margin from the leasing
4) When they get title and have the equipment back they then sell it on as refurbished and whatever they get is again pure profit.