It’s an evergreen question in fleet management: do you buy or lease equipment? It’s one that comes up even more often when the economy contracts, as distributors re-assess their resources. It also is unclear how long the current pandemic-driven downturn will last and whether it will have a sizeable influence on the lease-versus-buy decision.
“Downturns have an impact, though not for us directly,” says Gary Thompson, executive vice president and general manager at Powers Distributing, Orion, Mich. “[In] downturns, interest rates drop, cash is in shorter supply, so leasing may become more attractive. Depreciation, tax and stimulus policy are big — they determine who gets what write-offs and when. With 100 percent immediate write-off, if you have the cash to purchase or the ability to leverage purchases, buying becomes more interesting.”