Buying a New Compressor – Lease Purchasing vs Buying Outright

When you are looking to purchase a new compressor or compressed air system there are various ways you can finance your purchase, we are going to look at the 2 most popular – lease purchasing and buying outright to try and help you decide which option is best for your company.
Lease Purchasing
Lease purchasing is becoming an increasingly popular choice for companies when purchasing new compressed air equipment. Airpower UK Ltd works closely with Alliance & General Leasing to offer competitive 3 – 5 year lease purchase options. This enables your company to spread the cost of the purchase without having to compromise on the quality of the equipment you are buying.
With the current economic uncertainty spreading the cost of capital equipment over a set period allows a company to effectively plan their financial spend and avoid cash flow shortages.  After the lease period (3 or 5 years) the deeds for the equipment will be signed over to the customer providing full ownership. For large investments there can be tax advantages with lease purchasing.
It is also possible to include installation and maintenance costs in the leasing package. Extended warranty options are also available on most compressed air equipment meaning you can have complete peace of mind for a fixed monthly price with no hidden fees to worry about. If the idea of paying a fixed monthly rate for your compressed air is something which appeals to you then lease purchasing is the way to go.
For some customers they simply cannot afford to purchase the compressor outright, especially if they are setting up in a new unit and have other equipment to purchase, and therefore their best option is lease purchasing as it allows them to get the compressor they need immediately and pay it off over time.
Purchasing Outright 
Many compressor purchases are still financed outright – this is most commonly seen when a company is upgrading a single piece of equipment or they have increased their production and need a larger compressor to suit. In this instance when the company has a good cash flow and can reasonably afford to purchase the compressor outright then it is always the best option. As well as being the most cost-effective way of purchasing compressed air equipment it also gives the company full ownership of the compressor straight away. The benefit of this is that if the company grows rapidly and they need to upgrade their compressor once again they are able to sell or part exchange their existing machine to finance the new compressor.
In addition the company may be able to put the cost of the new compressor against their profits for the year meaning that they are able to pay less corporation tax. We often see an upturn in the sales of large screw compressors in March as companies are making purchases before the end of the tax year on April 5th.
Lease Purchasing or Buying Outright – which is best?
In the end it depends on the individual situation of your company – what type of compressor do you need? How good is your cash flow? Is your company expanding or just starting out? Do you prefer to be able to plan your financial spend or get it out the way in one go?
Our advice would always be to purchase the best equipment that you can afford – as the old adage goes “buy cheap, buy twice” and this is certainly true of compressed air equipment. Investing in a good quality compressor will always pay-off in the long run. In addition when you are looking to purchase a new compressor you need to ensure that you are future-proofing yourself. That doesn’t mean that you have to buy something twice as big and powerful as you currently require but you should look to the future and give yourself some leeway for increased demand in the future.
For pricing and advice on all aspects of purchasing compressed air equipment please contact our sales team on 01480 217904. We are always happy to offer free impartial advice based on your individual situation.