Renting hardware: Is it worth it for businesses?
The option of renting things instead of buying them is being offered in more and more areas, both for the private and B2B sectors. Especially for the area of technology, there are more and more providers on the market. We have therefore taken a look at when the rental model is actually worthwhile.
Rental offers for private use
Borrowing an object that is rarely used only for the time it is needed sounds logical and has been practised for a long time. Only a few people would think of buying a car that is only used once a year. For electronics, the lending concept is only slowly establishing itself. Many devices are still bought, even if they are rarely used. A classic example is the printer.
Large retailers or start-ups specialising in rentals now want to change this and allow private customers to use laptops, smartphones or televisions on the basis of a monthly rental fee.
However, the conditions of the individual providers are quite different. The decisive factors are the (minimum) rental periods and the prices. With one of the well-known providers, the current 13-inch MacBook Pro is available for a minimum term of 12 months from just under 80 euros per month. About 1,000 euros are thus due for annual use. This compares with a purchase price of around 1,500 euros. If you plan to use the device for longer than 1 ½ years, renting no longer brings any financial advantages (a subsequent resale is not yet taken into account).
Conclusion: The intended use decides
So it depends on the specific purpose. For those who have their eye on a particular device and would like to test it intensively before buying it, the rental model gives them the opportunity to do so. The only prerequisite is a correspondingly low minimum rental period from the provider. The same applies if the device is only needed for a short period of time for a specific project. Here, too, the total costs for renting are lower than for buying. But what does this mean for the rental model for companies?
Renting hardware for companies - it's the service that counts
The rental offer for companies is also growing. In addition to office furniture, e.g. desks, chairs and cabinets, hardware can now also be flexibly rented in order to optimally equip workplaces. If you only look at the price, it is also true for business offers that the longer the period of use, the less profitable it is to rent compared to buy. The prices are usually lower for corporate customers. For very long use, however, it is usually cheaper to buy. However, in the corporate context, other factors play a role that are usually not relevant for private individuals.
Latest technology
When renting hardware, providers always make the latest technology available. This means that employees are always working with the latest technology. Especially for products such as laptops, smartphones or tablets, product cycles are very short and new models appear annually. Equipping workplaces with new devices on a regular basis would mean enormous financial and administrative effort when purchasing them. For this reason, when you rent hardware with Lendis, you automatically receive an upgrade to the latest model after the initial rental period has expired, at the latest after 24 months.
Service offer
In the B2B sector, the product range is usually supplemented by a comprehensive service offer. This includes, for example, free and fast delivery of the devices or the pre-installation of required software. Defective or damaged devices are replaced within a short period of time so that employees can quickly be productive again. Business customers don't have to worry about anything once the rental is complete and employees are ready to start work immediately.
Respond flexibly to demand
The ability to react quickly to changes is of great importance for companies. The rental model provides additional flexibility. In the event of an increase in demand, for example due to new employees, additional technology can be rented without any problems. If equipment is no longer needed, it can easily be returned. It is also possible to change the equipment in this way.
Securing liquidity
Companies also benefit from financing advantages when renting hardware. Instead of high one-off costs for the purchase of required hardware, only small monthly amounts are due when renting laptops & co. This reduces cash outflow and avoids working capital. The company still has sufficient capital available for other investments. Especially for young companies, a secure cash flow is of great importance to drive the growth of the core business. But even in times of declining turnover, such as the current Corona crisis, secure liquidity is vital for companies of all sizes.
Tax treatment of the rent
As a result of the fact that one-off acquisition costs are converted into recurring rental amounts, there is a change from a business perspective from capital expenditure to operating expenditure (More on CapEx and OpEx). Capital and operating expenditures differ in their tax treatment. While capital expenditures are depreciated over time and thus only a certain portion is recognised in the tax return each year, operating expenses such as rent can be claimed in full for tax purposes in the corresponding period.
Administrative effort
One point that should not be neglected is the administrative effort involved in marketing old appliances. While it is still possible to dispose of or resell individual devices with manageable effort, this means an enormous administrative burden for companies. Within the framework of the rental model, the provider takes care of the entire process and the customer has no additional effort.
Attractive alternative to technology procurement
As is so often the case, it is not possible to make a blanket assessment of whether renting hardware is worthwhile or not. For private individuals, the price is the decisive criterion in the question of buying or renting. If the device is only needed for a clearly defined, short period of time, renting is an attractive alternative. However, since devices such as TVs, computers or smartphones are usually used regularly and for longer than 24 months, buying remains the better decision here.
In contrast, technology rental for companies is often an attractive and advantageous option for equipping workplaces for employees flexibly and inexpensively due to the numerous other benefits. Especially for companies that value a comprehensive and high-quality service offering and for whom flexibility is important, the rental model is the optimal choice.
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