Former car salesman turned contractor Mike Hassett prefers leasing his mini excavator rather than financing the machine.
One of the biggest reasons Mike prefers leasing: He likes the dependability of a new mini excavator. At the end of his excavator lease term, Mike knows what the residual value of his machine will be.
The owner of Green State Excavating in Vermont, Mike leases his machine from G. Stone Commercial.
“A lease gives me a checkpoint after three years,” Mike says. “If, after three years, the construction market is still good and the excavator is worth more than the residual value in my lease terms, I can buy it. I could even buy it, then sell it and capture that difference. If the construction market tanks and the excavator is worth less than the residual value, I can walk away.”
Advantages When You Lease a Mini Excavator
Leasing construction equipment, including mini excavators, presents numerous advantages for customers, says Nitesh Kalwar, financing strategy, and risk manager with Doosan Finance.
- Little or no down payment necessary
- Lower monthly payments than traditional financing
- Predictable monthly expense
- No trade-in hassles at the end of the term
- Fewer risks
- Equipment matched to projects
- Tax benefits
A Doosan mini excavator lease can be tailored to each customer’s needs.
“The lease terms for a Doosan mini excavator range from 24 to 60 months, similar to our larger construction equipment,” Nitesh says. “In addition, we offer customized annual hour usage limits for our mini excavator customers. The annual usage limits include 500 hours, 1,250 hours and 2,000 hours.”
If you’re new to Doosan, you may consider starting with a lease to become more familiar with the brand and the machines.
“A lease is a good way for a customer to get into a machine,” Nitesh says. “A customer may need the machine only for a two-year or three-year term. The customer will use the machine, see how the project goes and then the customer still has an option to buy it out at the end of the term.”
Cost to Lease a Mini Excavator
If you’re curious about what a Doosan mini excavator lease costs, Nitesh provides an example for a new DX35Z-7 excavator. The suggested list price of a Doosan DX35Z-7 is approximately $55,000, according to Nitesh.
“The typical term in our lease program is 36 months,” he says. “Leasing a DX35Z-7 for 500 annual hours a year for a 36-month term is $822.52 a month. The total cost of ownership for a customer to own the machine is very low. If I’m the customer, I can lease this machine at a low monthly payment of $822, get my project done, and if I still need the machine at the end of my term, I can buy it.”
Your dealer can customize your lease and include attachments, options and accessories. For example, if you want a bucket, thumb and quick coupler for your machine, your dealer can structure the lease to include the attachments along with the mini excavator.
End of the Lease: Your Options
At the end of the lease term, customers have three options.
- Continue with a month-to-month payment until they are done with the machine
- Buy out the machine with cash or financing
- Return the machine
“The customer has the option to buy out the DX35Z-7 mini excavator at the end of the lease term at 48% of the financing amount, which is about $26,400,” Nitesh says.
More than half of Doosan leasing customers purchase their machine at the end of the lease term. A benefit to leasing is that you and your dealer know the history of the machine and its maintenance schedule.
Tax Benefits of Leasing
Leasing not only gives you the opportunity to operate a new mini excavator, but you can take advantage of tax benefits.
“Machine leases have tax advantages,” Nitesh says. “Our customers can write off the entire machine lease payments as a business expense and deduct the monthly lease payments on their taxes.”
Visit with your accountant to make sure your lease meets the requirements.
Check out our tax savings tips white paper for more information about financial decisions regarding construction equipment.
A lease is a good way for a customer to get into a machine. A customer may need the machine only for a two-year or three-year term. The customer will use the machine, see how the project goes and then the customer still has an option to buy it out at the end of the term."