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Updating school technology: Leasing vs Purchasing

Blog
Robyn Lamport-Rann
22 Apr 2020

A couple of things you should consider are;

What specification of equipment do you require?

If you are looking at purchasing the newest and latest technology, this usually comes at a price and you may find it’s too expensive to purchase outright, a suitable alternative could be reviewing older models which may lower costs. You will also want to consider the size of your project and the outcomes you are trying to achieve, leasing may enable you to proceed with projects that otherwise you’d be unable to do due to funds.

How often are you looking to upgrade your ICT equipment?

Think about if you require a long or short term commitment and how often your school will require new technology to continue improvements of teaching and learning within the school.

For example, if you’re looking to renew your kit every 2-3 years you may be better with a lease agreement, returning the kit at the end of the lease period and then starting over with the next upgrade. If you plan to keep equipment for longer, say 5 years + then leasing over a longer term isn’t cost effective as you may end up paying more than the kit is worth.

How are you going to cover the cost?

Financing of the project is one of your key decision makers between choosing to purchase outright, or leasing.

If you are able to aggregate your IT requirements you may gain access to economies of scale which will bring down the cost of purchasing, however the capital outlay may still be too large for your school. Alternatively, you may choose to lease, in which you can spread out the cost across a length of time which suits you. As payments are fixed, you will know exactly what is due and when allowing for simpler and reliable budget forecasting.

Here’s a quick overview of some of the differences between them;

Cost and payment

You will need to pay the full costs for the equipment up front, which may affect cashflow within your school when buying outright. However, you won’t usually be required to pay any initial payment up front when leasing. Instead the cost of leasing is spread into fixed monthly payments over a period which suits you. This can be tailored to suit your school’s budget and can be paid monthly, quarterly or annually.

Ownership

If buying outright you will have full ownership of the assets so you can use or alter the equipment as you wish. However, when leasing, the assets remain property of the lease company as opposed to your school, at the end of the leasing term you will not own the equipment.

Maintenance

You have control of the maintenance when buying outright, which means you can maintain the uptake in accordance with your own schedule. On the other hand, at the end of a lease agreement you are expected to return the kit to a specified condition, therefore you may want to think about additions such as accidental damage insurance to ensure there are no surprises at the end of the agreement term.

Long term plan

Buying outright works well if the intention is to keep the kit for a longer period (for example more than 5 years). Although, if you’re intention is to replace the equipment every few years to keep up with updated technology then it can be more beneficial to lease.

Technology

Both options do allow access to the latest technology, across a wide range of IT equipment and brands, along with extras such as additional warranties and insurance.

Once you've made your decision about how you would like to update your ICT equipment, or if you still need some extra guidance, we've compiled some helpful information on the process involved in upgrading school ICT equipment through leasing. If you have any further questions about the options available, our team are happy to help, get in touch!

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Author

Robyn Lamport-Rann

Category Manager for ICT

YPO