Leave v. Purchase

[Ralph Shnelvar <ralphs@xxxxxxxxx>]

On Wed, 29 Mar 2006 16:07:42 -0800 (PST), you wrote:

>All,
>
>4) If I'm interpreting Bo right, Hart charges the same amount to lease its equipment and software for one year that it sells it for.  Uhhhh, no further questions, Your Honor.

When a seller sets up a lease so that the lease price and the purchase price
are the same, it say that the seller believes that what it is selling will
be junk at the end of the period.

Anyone who leases a car should know that the higher the trade-in value, the
lower the lease cost.

It doesn't matter if we're talking about cars, houses, computers, or voting
equipment: the economic principle is always the same.


Since that period is one year, the seller (Hart Intercivic) is telling us
that it believes what it is selling is _now_ junk since depreciation is
almost always front-loaded.  Certainly, by the end of the year, it will be
junk and we will have a maintenance headache as well as being tied into a
system "that we already know."

Picking the message out of the noise this time was easy.

Ralph Shnelvar