A department could budget for the capital expenditure in a subsequent fiscal year. A sound lease analysis must begin with a quantitative analysis, and then qualitative factors can be considered before making the final lease versus buy decision. Transfers the risk of technological obsolescence to the lessor. Preserves capital and avoids large cash outlays. Bundles one-time costs with the lease.
Matches costs with the useful life of the equipment.
May offer other value-added services such as maintenance. May offer operating flexibility to respond to changing conditions and demand. Involves a partnering relationship with its related risks. Is generally more complicated than an outright purchase. The procedure to be followed for a lease versus buy decision depends on the type of equipment under consideration.