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A lease is a
simple, easy way to enjoy the benefits of the latest technology
without assuming the upfront
costs and risks of ownership. We refer to “equipment” lease,
but bear in
mind, your
lease may include equipment and services, plus the additional costs
of taxes, installation, and
shipping (a big benefit).
Simply
defined, a lease is a usage agreement between an equipment owner (lessor)
and a user of that
equipment (the
lessee). The lessee pays a periodic fee, usually monthly, to the
lessor for the use of the
property.
Generally, leases take the form of written contracts with specific
terms and conditions spelled
out: length of
lease term (usually 24, 36, 48, or 60 months), amount and timing of
lease payments, and any
end-of-lease conditions or stipulations.
The lessor is
usually viewed as the owner of the equipment during the lease term,
but depending on the
type of lease
chosen, either the lessee or the lessor may be able to claim the tax
benefits of equipment
ownership. To
learn more about the different types of lease structures available,
see "Selecting the Right
Type of Lease".
Regardless of
which type of lease is selected, the future expected value of the
equipment (the residual
value) is
considered when pricing most types of leases. The residual value is
the lessor's estimate today
of the value of the equipment when the lease term ends.
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