HP Business Lease

Does anyone lease their laptop from HP? (avoidable on their business lines)

I don't get it. I understand the concept of lease, you pay for the depreciation during use, and give it back at end of your term. If you look at their 12mo and 36mo 0% lease payments, they simply take the entire sales price and divide into equal monthly payments. So this would imply that the entire value of the laptop depreciates over 1 year or 3 years, depending on which contract you go with. And then at the end, after you've paid the entire purchase price in interest-free payments, you give it back to HP or buy it at free-market-value. Looking at a recent sale of an 8510w ($550) this suggest the free market value of the 8540w I want will be in the $500 range 3 years from now. So I pay for the entire cost of laptop over 3 years, then I have pay approximately $500 if I want to keep it or I have nothing??? I understand the tax and cashflow benefits of leasing, but the deal still seems bad to me.

I know I should probably just call in, but it feels like I am missing an essential part to the leasing deal and wanted to hear from other customers first.

 

Company doesn't need to have full price available in cash or take loan to pay for it, so it's tempting solution for starting businesses and those in need of new equipment but short on funds.

Depending on local legislation, lease payments could be tax deductible in certain percentage or even fully.

In case of computers, companies don't usually gain mony when those are recycled. Instead they bring more expenses as hard drives need to be destroyed or wiped.

Most laptops I've prepared for customers were in 500e range as new, thus being almost worthless at the age of 3-5 years. Most often those went to office duty, basically never to be moved out of office.

 

After 3 years a laptop is worthless. (most are closer to 18 months to obsolete)

Given the time value of money paying later is always better than paying now.

I don't understand the confusion.

 

Net Present Value depends on the time value of money and each cash flow. You claim the laptop is worthless in 3 years, I stated that my research suggests the laptop I am interested will have a fair market value of approximately $500 in three years.

The laptop in question is priced at $1680. Under your assumption, there are 36 payments of $46.67 which would require money to be worth only 0.5% per year to get a NPV equal to the sale price. Even a savings account can do better, so this gives you a theoretically reduced cost of ownership if your other capitol is put to work at a higher rate and you truly believe the laptop is more of a liability to own and are happy to return it to HP for nothing.

Under my assumption, there is an extra $500 payment at the end since I do not want to be forced into keeping it for exactly 3 years, then returning it and buying/leasing a new one right then. This requires money to be worth 14.5% per year to break even on buying it outright.