ByHave you been considering having a coffee vending machine in your office but are confused if you want to lease it or rent it? Whether you are looking to buy or lease a coffee vending machine depends on your budget, the type of vending machine you would require and other factors.
However, having one is most definitely important as it can improve the guest experience or simply keep your employees happy as they can quench their coffee cravings as and when they want.
The best way to help you decide is by considering:
- Your budget – can you spend the full price in one lump sum?
- Contract benefits – do you want to have a service agreement?
- Length of ownership – do you want a coffee machine for less than 3 years?
These questions should help you decide and help us advise you the best way we can!
Let’s explore a few other factors you must consider before deciding on whether you want to buy or lease it.
Leasing a coffee vending machine
Leasing a coffee vending machine is similar to renting one. But as opposed to renting, when you lease a coffee machine you agree to pay a bulk amount or regular amounts for a set period of time, but do not have ownership of the machine, but still use it just like you are owning it. However, in leasing you do have the option of owning the coffee machine, upgrading it or returning it, at the end of the agreement period.
One of the major advantages of a coffee vending machine would be the efficiency of leasing it. For example, at the end of the agreement, you have a number of choices like owning it, upgrading it or returning it as per your requirements.
However, the free maintenance plan of the coffee vending machine does not apply for a leased coffee vending machine. To pay for the vending machine with this option you must make a downpayment and monthly instalments.
Additionally, the leasing option comes with quite a few tax benefits, meaning you are exempt from taxes as you do not own it. There is also an additional advantage of reclaiming GST. If you are GST registered, you can reclaim GST on agree monthly repayments and save this extra income for other operations that require extra capital.
Having new equipment available when you need it and being able to spread the expense over time are two other benefits of leasing your coffee maker.
However, the one major disadvantage of leasing a coffee vending machine is that it’s a lot of upfront money to pay at one shot and is expensive in the long-term when compared to buying a coffee machine. You may also need to pay penalties in case you decide to terminate the leasing contract earlier than the agree date.
Important Consideration
If you’re a new business, keep in mind that some leasing companies may decline your lease application if you haven’t been in operation for at least 12-24 months. This policy is in place to ensure leasing companies are protected in terms of payment. Unfortunately, there are often no exceptions to this rule. This factor may ultimately determine whether you can lease or need to purchase a coffee machine for your business.
Buying a coffee vending machine
Buying a coffee vending machine always sounds like the more appealing option due to various advantages it comes with. Purchasing a coffee vending machine requires you to pay a lump sum amount in one go, and you own it. So, how does the buying option work? You make the payment for the coffee machine, set it up and wait for the professional technician to instal it, on the given date.
Buying the coffee vending machine comes with a myriad of benefits. Unlike the other options, when you purchase a coffee vending machine, you have the luxury of not choosing a higher range model as you own complete control over it, right from choosing the model you want to buy to how frequently you wish to use it.
Since you have sole ownership of the machine, there is a lot less paperwork involved, and you need not go through financial checks, and there are no contractual obligations.
Depreciation can be used to offset the initial investment in your tax returns over time, however, it can only be used for capital allowances for purchases. If you intend to keep the coffee maker for a long time, purchasing one is a wise choice.
When you buy a coffee vending machine, it usually comes with a 1-year guarantee. However the maintenance and servicing charges do not come as part of the overall payment of the purchase, unlike in rental and lease options. If your machine breaks down at any point after the guarantee period, you will have to pay extra charges to get it fixed or for consistent maintenance.
What kind of coffee vending machine do you need?
Let’s revisit the “other elements” we mentioned earlier. The first step in determining the type of coffee machine you need is crucial.
Whether you aim to upgrade your establishment’s coffee production, enhance the guest experience in your hotel, increase profits in your café, or cater to the personal preferences of your office, selecting the right coffee machine is essential.
For most coffee drinkers, choosing a flavour that suits their palate is the primary concern, but with the increasing variety of options, this choice is becoming more complex.
We’ve discussed the benefits and drawbacks of three different types of coffee machines. Your decision should be based on your budget and intended use.
Consider which option would be most effective for your specific situation. Many people start by renting a coffee machine and, as their business grows, choose to extend their lease.
