The following is an excerpt from a story in Rural Lifestyle Dealer's fall issue, "What's New with Retail Financing." Read the complete story,

Leasing in the equipment industry has traditionally been concentrated in the large construction or ag equipment segments to help customers afford big machines with high price tags. However, rural equipment dealers may want to take a look at the arrangement as a new way to sell to light construction companies, landscapers, small acreage farmers and even large property owners.

“What’s changed now in the rural equipment market is the price of the equipment. Entrepreneurs who may need to purchase equipment for their landscaping businesses, for example, face spending $40,000-$50,000. They’re asking, ‘How can I afford this?’ Dealers are looking for ways to offset that concern. It all comes down to affordability and cashflow,” says James Falk, director of knowledge management for DLL. “In order to make monthly payments affordable for purchased equipment, some of the financing terms may stretch to 84 months. The problem with that arrangement is some customers don’t necessarily want to keep a machine around that long because of the potential repairs they’ll face. Also, purchase arrangements may require a 10-20% down payment, while leases generally require only two lease payments upfront. "These are just some of the potential benefits of leasing,” Falk says.

Falk also says leasing addresses the issue of the rising cost of rural equipment, which is making it even more challenging for customers to afford new equipment or stay current with equipment. “Many of your competitors are not offering leasing options, so it’s a good way to differentiate your dealership. Offering additional financing options means you have a greater chance of meeting customers’ needs, and they are less likely to continue shopping at other dealerships. Also, by showing them the lower monthly payment, regardless of whether they choose a leasing arrangement, you provide the perception that the equipment your dealership sells is more affordable,” Falk says.