NCJ Number
106405
Journal
Security Volume: 24 Issue: 8 Dated: (August 1987) Pages: 51-54
Date Published
1987
Length
4 pages
Annotation
Factors to consider in deciding whether to lease or buy a security system for a business include security needs, tax advantages, equipment maintenance, and overall cost.
Abstract
An advantage of buying a security system is that it can be altered and improved as determined by the owner. The equipment can be depreciated for tax advantages according to the equipment class. Recent changes in tax laws, however, have complicated this type of depreciation and made it less available. Purchasing the equipment does not involve a long-term commitment to an alarm dealer, except for a separate maintenance contract. If the alarm company goes out of business, an equipment owner can select another firm to service the system. Those who lease equipment may have difficulty convincing another firm to take over the leasing of the existing system. The total cost of buying is often lower than the long-term leasing costs, and the purchased equipment may be sold. The principal advantage of leasing is that it does not use up working capital to the extent of a purchase. Leasing also offers tax advantages under recent law that were previously available only with a capital purchase. Leases generally involve maintenance by the leaser and offer the option of upgrading equipment upon entering a new contract term.