Leasing offers opportunities for managers of government mowing fleets
Experts from the John Deere Turf Division discuss the benefits of leasing mowing equipment for government fleet managers.
For government agencies, a key piece to keeping a business up and running is owning, and maintaining, the appropriate equipment. In the age of increasingly tight budgets, financial limitations often place a strain on government agencies, forcing them to make do with less. However, there are options for government buyers looking to overcome the limited budget hurdle.
Increasingly, government agencies are turning to leasing as a way to gain access to equipment they need, but cannot necessarily purchase right away. Leasing not only offers a way to obtain equipment affordably but can also provide an accurate cost of operation analysis for the leasing agency. This is especially true when the lease is for a period of time that is covered by warranty. Many leases also offer the ability to add an extended warranty into the payments if an agency wants to lease beyond the typical manufacturer’s warranty.
Traditionally, a government agency uses its capital budget to purchase the necessary equipment at the beginning of the year, and uses its operating budget to maintain the fleet from month to month. As we have seen across the board, budgets are being tightened, presenting a problem for government agencies. By leasing over outright purchasing, government agencies can use the operating budget to help carry the cost throughout the year, as opposed to paying it all at once.
Government agencies often face restrictions when opting to lease. More states are opening up to the option, altering state statutes to allow government agencies to choose to lease. In states that are less flexible, the manufacturer can become an ally. Manufacturers, like John Deere, can often work out financing deals that fit into the state statutes, while still offering a monthly payment option and allowing the equipment to be returned in case funds are cut mid-year.
While it is still a growing trend, more government agencies are finding that the benefits of leasing outweigh the benefits of buying. The increased flexibility offers an appealing solution to government buyers who are handed a limited budget. The option of leasing provides government agencies access to equipment they need when they need it, helping to keep the fleet up and running in the long run.
Jack Switzer and Bill Frank are government business managers for the John Deere Turf Division. The division is based in Cary, N.C.