Does the Shoe Fit?
By Kevin F. Clune, CLP
The caricature in our recent postcard depicts a young boy in an oversized suit and shoes. While a small sized shoe will cause blisters and pants that are too large won’t stay up, one may be unaware of an “unsuitable” lease partner until the end of the lease term.
A tangible product can be examined and possibly even tested for a trial period but a service commodity such as a lease is difficult to comparison shop. For example, when shopping for an auto or homeowners insurance carrier, one can compare premium bids and determine the most economical policy. However, the most important factor to learn is the quality of the insurance carrier’s response to a claim. A discerning consumer will inquire about their performance when their services are needed and may even search the internet to determine customer satisfaction. With the recent floods in the Midwest, some were surprised that their policies did not cover flood damage.
This same process of learning what is in the fine print of a lease contract and also gauging the happiness of previous customers should hold true when choosing a lease partner.
- What will be the total cost of the lease?
- Are there hidden fees that may be imposed at a later date?
- What are the return conditions?
- Who will I contact if I have a question about my lease payment, and are they responsive?
- Are previous customers satisfied with this leasing company?
If you are a vendor who is recommending a lease program to a customer, it is in your best interest to be confident in your choice. Otherwise, you may risk losing future business from this same customer. Also, the management cost associated with onerous “end of lease” terms that are imposed by the leasing company may eat up your profits. Ask yourself if you trust them enough to use them for your own financing.
If you are a lessee, it is incumbent upon you to be aware of the business practices and customer satisfaction of the leasing company with whom you are financing your equipment acquisition. A vendor may be unaware of the answers to these questions. If you can’t personally contact the lease provider and make some inquiries, it may be in your best interest to seek out another company.
In conclusion, if the shoe doesn’t fit, keep on shopping.
Good luck,
Kevin F. Clune, CLP
Clune & Company
