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North west MN | I was told by farm credit a lease and a loan will end up costing the same if set up right. I always thought there was some hidden cost but he said no. He also said that leases will get popular if 179 is reduced next year as a lease pymt can be all wrote off in the year it is paid. If looking at one find out all the lease payments and the buyout then put it on a loan schedule and see if there is any difference in the total payments. I did lease with farm credit on a newer semi years ago and I compaired what the loan would cost and what all the lease payments and the buyout would cost and they were both within a few dollars when all said and done. That year I had used up all my 179 so a lease was more attractive and thought I would try it the only drawback I can see is you don't have a asset on your balance sheet untill the end of the lease. Most leases for farmers are set up so you own it at the end you wouldn't want to tear down a building or not buy out a machine if it was just about paid for. I think there could be some expensive leases out out there from lease companys using the rules to thier advantage so be carefull. | |
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Leasing question
