Are you in the dark with the total cost of your lease?
In any lease, a monthly payment rarely defines total cost. It is common for leasing companies to include onerous terms and conditions that blur transparency, inhibit flexibility and result in unanticipated charges for the customer. These predatory practices make it difficult to calculate the total cost of a lease.
For example, many leasing companies charge hourly overage charges for exceeding an annual usage limit. These charges can be expensive ranging from $1.00 to $7.00 per hour thereby creating an unbudgeted surprise for the internal customer. In addition, prior to equipment turn-in, we have seen leasing companies require expensive inspection fees that can exceed $500 per unit, performed by a “qualified” maintenance provider. In addition to the expense, the interpretation of “qualified” maintenance provider is intentionally made unclear, i.e. the lessee’s maintenance provider may not be “qualified” per the lessor’s definition and may restrict the lessee’s ability to maintain equipment however you choose. A lessee should have the flexibility to use a maintenance provider of their choice; either certified by the OEM, a 3rd party maintenance provider or should be able to self-maintain.
Other challenges to calculating total cost may include:
- The requirement to store off-lease equipment for extended periods of time; up to 90 days;
- “All or none” provisions;
- Fixed term renewal rates that increase over time.
Finally, if your lessor does not offer an asset tracking tool in real time, that notifies you in advance of lease termination dates, then you may have difficulty making timely, informed decisions about what to do with expiring leases.
For our customers, Pacific Rim Capital eliminates all predatory terms and conditions. We believe in transparency and ethical business practices. We will never deceive you with a low monthly payment to win the business, only to charge exorbitant fees at the end of the lease. At PRC, we make it easy to calculate the total cost of a lease and our On-line Customer Portal will make it manageable for you to track your assets and plan for equipment refreshes at lease end.