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Issues To Watch For When Leasing

Things To Watch For With Equipment Leasing

The Equipment Leasing industry is quite large, and as with any industry, there are good, and not so good players. Over the course of this article, we will describe things you should definitely avoid, namely the practices of dishonest companies within our industry. If you have any comments or questions about this article, please feel free to contact us here.

Spam Companies

Although an email account ensures that you're probably already well aware of the schemes offered up via spam email, it is important to address this issue. When receiving messages such as "Your company has been selected to receive a $100,000 leasing credit line! Simply call us to activate today!", it is important to note that this is one of the biggest scams currently being pitched. In most cases, this is simply a request to get you to fill out a credit application (which is sometimes called a "membership confirmation" or "introductory account"), which then determines if you can be approved at all (and is nowhere close to an actual lease agreement). Operators like this also are masters of "fine print" and will always attempt to rip you off. After all, they spammed you in the first place. How honest can they be?

Also, realize filling out several credit applications can actually be very damaging to your credit rating, because it suggests instability. Remember this the next time somebody "Pre-Approves" you for some sort of leasing credit line.

Ownership Scams

Beware of operators who attempt to close you by offering ownership of the equipment at lease end. You must ensure that a one-dollar purchase option is available - either in the lease document itself, or as an attachment to that document. If this is not in your lease, "ownership" will cost you anywhere from 10%-60% of the equipment's original value! So having the "one dollar option" is a must if you are absolutely sure that you would like to own the equipment post-lease. When you are dealing with an operator you suspect might be shady, consider hiring a lawyer to look over all documents - it can save you lots of hardship and money in the future!

Interest Rate Scams

Although many companies trumpet certain rates, leasing service associates can typically only be held accountable to monthly payments, purchase options, documentation fees, contract length, total finance amount and advance payments totals. In general, Interest Rates usually do not appear in equipment leasing contracts. This is standard across the industry. So beware of players who offer to guarantee low rates. They usually are promising something they cannot provide! We encourage you to comparison shop, but suggest you use the terms listed above, as opposed to straight interest rate. In most cases, Interest Rate does not even begin to address the important costs involved with a lease.

Observe The Difference Between Advance Rentals And Security Deposits

With most equipment leasing agreements, advance rental fees are usually applied to the first monthly payment, and often to the final payment as well. This is a common fee. However, "security deposits" are often dependent on the ethics of your lease provider. Some companies may offer non-refundable deposits, some are not credited to the lease total. Always ensure you know exactly how the security deposit will be applied before you sign anything.

"No Penalty For Early Buyout"

Despite what any lease salesperson says, equipment lease contracts almost always DO NOT allow cancellation. This is just a fact of life in the leasing industry. If you wish to accelerate your payments, however, quality leasing companies will discount your payments at an agreed upon rate. Other companies will only let you pay all of your payments on the spot. So understand that leasing contracts are almost always non-negotiable.

Have a question, either about Access Equipment Leasing, or applying for leasing in general? Contact us here.

Access Equipment Leasing

3972 Barranca Pkwy
Irvine, CA
92606
Call Toll Free: 1-866-546-8258