Buy, borrow or lease?
There are three ways you can buy an asset (vehicle, business equipment or farm machinery, for example). You can pay cash (buy), finance the purchase with a loan (borrow) or enjoy the use of the asset without actually owning it (lease). Each has its pros and cons.
Buy
The clear advantage is you only pay the purchase cost, and the asset is yours from day one. But remember, once you’ve spent your money on an asset, it’s no longer available for other things like investment opportunities or emergencies. You can always sell your asset if you need to, but you may not get back what you paid, especially if you need to sell in a hurry.
bottom line : buying outright is a good option if you have the cash now, plus enough left over for emergencies.
Borrow
The advantage of borrowing is that you can get the asset you want now, with little or no deposit, and you still have your savings put aside for whatever else life throws at you. But, your asset will cost you more. Your MTF representative can help you work out a repayment plan that helps you keep the cost of borrowing to a minimum.
bottom line : borrowing is a good option if you don't have the money now but want to own the asset as soon as possible.
Lease
Leasing is a cost-effective way to enjoy the use of an asset without the responsibility of ownership. There’s no initial outlay and payments are usually lower than loan repayments. Because you never actually own the asset, you can easily upgrade to a newer model at the end of your lease term, or simply walk away.
bottom line : leasing is a cost-effective option if you use your asset for business, intend to use the asset for a fixed period of time, or like to upgrade regularly.