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While there are a number of options available to you at the end of a CT&L Lease, we've really left it up to you to determine what fits your needs. It makes no difference to us whether you want to purchase the equipment, send it back to us, extend the lease, or even if you're undecided. We can accommodate your wishes.
Below, we've divided our End Of Lease Options into four general categories and outlined how each works. Note that CT&L does not restrict you to just one option for the entire Lease Schedule. You can easily choose to renew some items on a lease, purchase a few more, and send the remainder back to us. Whatever you want to do is fine with us.
So take a moment and explore how each or every option might dovetail with how you want to handle a lease when it expires:
Keep in mind that in almost all cases where the End of Lease Option is not fixed in the lease contract (such as a lease with a Fixed Purchase Price), you are free to leave your options open. At the end of the lease, you can review which option best fits your needs, or budget, and decide upon a course of action at that time.
For a more detailed explanation of how CT&L manages the End of Lease Process, and how we work proactively to make it easy for our clients, click here. You'll learn how we handle each option, and what you can expect from us when it's time to wrap up your lease schedule.
Renew The Lease
Renewing your lease at expiration is the perfect option if the equipment is working fine for you, and you need it for a fixed time period beyond the original lease term. You avoid the costs and disruption associated with removing "in place" equipment, and the renewal rate is generally 60 to 80% of the current lease rental.
Renewals are a good fit if you need the equipment for any term longer than six months. Rather than continuing to pay the current lease rental on a "Month-to-Month" basis, CT&L can renew the lease based upon the value of the equipment at the end of the lease, which is typically much less than the original equipment cost. Renewal terms of 6 or 12 months are common, but CT&L does not place a limit on the renewal term. We're happy to accommodate your needs.
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Purchase The Equipment
Purchasing the equipment at the end of the lease can be an attractive option that works to your advantage. You have two alternatives in looking at a Purchase Option:
- Fixed Purchase Price
- Fair Market Value ("FMV") Purchase Price
The Fixed Purchase Price is determined upfront, when negotiating the lease, and can be very useful for planning purposes. You know, in advance, exactly what the purchase price will be at the end of the lease. Typically, Fixed Purchase Prices are for 10% of the equipment cost, or for $1.00, but almost any purchase price can be structured. Fixing the purchase price upfront alleviates some of the uncertainty involved in resolving the equipment value at the end of the lease, or in trying to determine how to handle the equipment when the lease expires.
A FMV Purchase Price is determined in the last few months of the lease. CT&L will research the used equipment market and present you with the current market value for the equipment you have on lease. You then pay only that amount to purchase the equipment. Supply and demand in the marketplace determine that amount, and there are times when that is a savings over a Fixed Purchase Price.
Both are attractive if the equipment on lease looks to be useful in your organization for some time to come. Rather than continuing to pay a monthly rental, as on a Renewal, you can purchase the equipment and do with it as you wish.
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Return The Equipment
If you know that you wish to refresh your IT equipment when the lease expires, returning the equipment to CT&L can relieve you of that hassle and help make way for the latest technology.
There's really nothing complicated about it. We've outlined the details in the Returning Equipment discussion found in the Customer Service section of our site, and we've tried to make the transfer as simple as possible. A big "plus" is that returning the equipment to CT&L allows you to concentrate on making yourself more productive by bringing in cutting-edge hardware. You're no longer in the "Used Equipment" business of storage and/or disposal. That's where we take over.
The best part is that you can always keep this option open. If you don't wish to purchase the equipment, or renew the lease, you can simply default to sending it back to us. That's flexibility. That's what we're about.
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Do Nothing
Yep. Really. All of our leases (except those with a Fixed Purchase Price) allow you to do absolutely nothing at the end of the lease, and still keep the equipment in place. It's what we refer to as a "Month-to-Month," or in shorthand, a "MTM." The moniker derives from the simple fact that, based upon your choices, the lease could change at the end of any given monthly period.
Effectively, a MTM is a series of monthly "self renewals" of the existing lease schedule. If you're not sure of what you want to do with the equipment, whether to keep it, buy it, or send it back, you can simply let the lease continue on it's course without interruption. The equipment remains in place, the monthly rent stays the same, and there's no penalty for not coming up with a resolution. It's perfect for those IT managers "hamstringed" by users who are unsure of what they want to do. We see it a lot.
This is the best option if you're undecided when a lease is expiring. Nothing has to change until you're sure of which direction you want to proceed in. Just let us know if you wish to change anything.
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