Tips To Select The Best Leasing Company For Your Car Wash Equipment

Have you decided to start a car wash business? If so, you will need to determine how you will be acquiring the equipment needed for your business. Though loans are a good option, one of the most popular ways to procure car wash equipment is leasing. If you wish to know more about the leasing options available to you, just contact the leasing companies in your area. But be sure to carefully filter them so that you only associate with good leasing companies.

What To Look For In A Leasing Company

When you have decided to procure your car wash equipment by leasing, your next decision would be to select a leasing company. To ensure that you only associate with a good leasing company, you should keep the following things in mind –

Lease Types: One of the first things to look for in a leasing company is the type of lease offered. Generally, there are two types of lease offered by a leasing company. A lease which allows you to own the equipment after the lease period is known as the Purchase Option lease. The second type of lease is called a Fair market Value (FMV) lease. But in an FMV lease, you do not own the equipment after the lease period. So knowing what types of lease are offered by a leasing company is very important if you wish to own the equipment after the lease period ends. Additionally, both lease will have two different repayment amounts. Usually, the monthly payment for the Purchase Option lease will be more expensive than an FMV lease. So if you are looking for the cheapest lease, then you should definitely enquire as to whether the company offers an FMV lease. Generally, most of the leasing companies offer both types of leases and as such, you should not face too much problem in this regard.

Types Of Repayment: You should also consider the types of repayment offered by the leasing company. Some companies will only provide a fixed repayment option in which you will have to pay a fixed amount every month over the lease period. This is the normal repayment option offered by most leasing companies. But some companies may offer an alternative repayment plan in which your monthly payment becomes lower as the lease period progress, to keep up with the decrease in the value of the equipment. For example, you may pay $500 per month for a $20000 equipment this year. But if the equipment is revalued at $12000 next year, you may only need to pay $300 per month.

Collateral: Another major factor you should consider is the collateral required by the leasing company. Normally, your equipment itself is sufficient collateral and companies never ask for any additional collateral. However, if your credit situation is very bad, then you may be required to submit an additional collateral. If such a situation arises, it is better that you search for another leasing company who can lease to you without any additional collateral. As said earlier, usually your equipment itself is the only collateral required by the company. As such, you are less likely to encounter such a problem.

Initial Expenses: You also should have a clear idea of the initial expenses you will incur to obtain the lease. There may be expenses like application fees and such. You should ask the company about the full expenses related to the lease. Additionally, leasing companies will expect you to pay a few months’ lease payments in advance. This may impact capital funds significantly, especially if your capital is limited. So it is very important that you know how many months’ advance you will have to pay. If you are lucky, you may come across a leasing company who do not require any advance payments.

It is also better to check the history of the leasing company to ensure that you do not get entangled in any fraudulent companies. Make sure that they have long years of experience in leasing equipment and that their customer testimonials are also positive. Associating with a reputable leasing company will go a long way in making your equipment acquisition a quick and stress free affair.