Within the electronic test and measurement equipment sector, for example, there hasn't traditionally been much of a rental culture in Spain, but this is changing. It's becoming increasingly important to consider all options when financing new products. Purchasing test equipment requires cash, capital, and commitment. Many of these devices are specialized, with complex technology, so it's not just the purchase price; there are also lifecycle costs. Often, there's a substantial difference between the initial cost and ongoing maintenance costs. In fact, as a general rule, a test and measurement device typically costs twice its original purchase price due to the added costs of software updates and comprehensive maintenance.
To use a simple analogy, test and measurement equipment is somewhat like buying or leasing a car. First, the consumer considers how long they need the car and then weighs not only the purchase price but also the associated recurring costs, such as regular servicing, taxes, annual insurance, and repairs. Just as car engines need to be fine-tuned to keep them running perfectly, the same is true for test equipment, but on a much more sophisticated scale.
The fundamental requirement for test and measurement equipment is that it needs to measure the necessary parameters with a defined degree of accuracy. From time to time, it may be necessary to update the equipment's software and hardware to the latest version to meet ever-changing user needs. The rental option eliminates the cost, time, and labor associated with managing this specialized equipment, allowing companies to access the devices they need without the added responsibility of allocating human and financial resources for calibration, maintenance, repairs, and upgrades.
Another major advantage of leasing is that a company can undertake short-term projects without the large investments required for acquiring capital goods. Very few companies can justify purchasing a device if they will only use it for a few months; therefore, they must look for other options that allow them to complete a project without incurring a long-term financial burden. The direct purchase of a device that later sits unused on warehouse shelves cannot be considered a true asset; however, with leasing, the device is delivered to the facility with its calibration certificate, and the work can be completed at a fixed cost.
Renting test and measurement equipment means companies can stay ahead of the competition without facing a high Total Cost of Ownership. In this sector, having the right equipment is crucial. Renting allows companies to access the latest and most advanced devices for a small percentage of the purchase price. Furthermore, a fixed rental payment allows companies to benefit from the expertise of the renting company, as their specialized technical staff operate the equipment daily and can share their specialized knowledge of most current products.
It's clear that one of the main advantages of rental equipment is flexibility. If companies use rental agreements to maximize benefits, it will help reduce costs and improve efficiency. Businesses feel in control because they can terminate rental agreements at any time and can change or re-rent the equipment. However, in the long run, continued use, purchasing the device, and supporting the additional lifecycle costs may be the most economical way to provide engineers with the tools they need to do their jobs.
Therefore, when deciding between buying and leasing, it's essential to consider maintenance costs, frequency and duration of use, and the technological lifecycle of the devices.
Leasing is cost-effective and allows companies to utilize the latest test and measurement equipment without significantly impacting their bottom line.
Author: David Fernández, Country Manager for Spain and Portugal at Microlease
