Leasing Vs Buying Farm Equipment

Farmers may wonder, about the out the differences between leasing and buying farm equipment. Both have their own advantages and disadvantages, few we will discuss here.

Before choosing between leasing and buying farm machinery,  we should consider these 3 major points and these are - what will you use it for? For how long you need it? Is it a one-time need or you need it to use regularly.

There is not a very huge difference in leasing or buying farm equipment.

1. When you buy equipment, as an owner you can use your machinery whenever you need it, without any restrictions. There is no hassle in using own equipment. While in leasing there is the hassle of doing all the paperwork associated with it.

2. While leasing of farm equipment a farmer has to invest in a fixed trade every few years and use the machine as per the bond. Fees are divided into two parts of principal and interest with the final being tax-deductible. Leasing offers lower wages that will help farmers to use this money in crop protection and production.

3. Leasing can be from short term to long term depending on the requirement of a farmer. Farmers who cannot afford large agricultural equipment or machines like combines, grain drillers, skid steers and other, can lease or rent.  But in case they use it frequently and a major part of their farming operations depends on these machines than buying a tractor, combine or other farm machinery will be more beneficial for them.

Owner of equipment also has to bear all the costs including market depreciation, insurance, taxes, maintenance and major repairs. Another good way to save large purchase costs is to buy used farm equipment. So leasing and buying both have their advantages and disadvantages, do your research and explore the market well before making any decision.