If you are a farmer, then you would need to purchase a piece of agricultural equipment at one point in your life. While doing this, you would need to consider many factors. At first, you would need to think about which equipment you require. You have to see your needs and then decide on the type of equipment that would best suit your need.
After that, you have to consider many brands and go into a long and tiresome process of finding the best equipment for yourself. However, before you do any of this, it is best to see if you should purchase and equipment or lease one. Following are some advantages and disadvantages of both;
Leasing a Farm Equipment
Some advantages of leasing equipment are;
It is suitable for short term projects. As in, if you need a tractor, then you can enter into a kubota tractor lease. You can sign a lease which will have a set period. After you have used the equipment in that period, you can give it back. No addditional costs will follow for this.
The transaction process is short and easy. The paperwork is also small, and one document has to be signed, made by the vendor. After you pay for the equipment, you can use it right away.
The down payment asked by the vendors is usually less so that anyone can lease equipment. The terms and the costs of the lease are flexible and depend on your profit. They can be easily customized depending on you.
Purchasing a Farm Equipment
Some farmers go for this option. It might be a better option for people who want to work with some equipment for most of their business. Through purchasing equipment, you would have complete ownership of it. In the long run, this method turns out to be more cost-effective. You can also build equity through this method.
Then again, this isn’t very efficient if you require farm machienry for short term. Spending such a hefty amount to buy this machinery would not be an intelligent move, leasing would be a better option.
Many farmers use equity to finance machine purchases. If you own the machinery, you will be responsible for all other costs as well. The additional prices include but are not limited to repair fees, taxes, and general equipment maintenance. A piece of farm equipment lasts almost ten to fifteen years; hence, many variables have to be considered before opting for this path.