Kubota Leasing, a Q & A

From Great Plains living Winter 2012

GPL:  What is Kubota Leasing?
RC:  Kubota Leasing is a group that was created to help provide more options to Kubota’s commercial  and municipal customers.  Kubota Leasing provides the customer with several leasing options across the entire spectrum of Kubota Product.
GPL:  How is a lease different from “normal” financing or paying cash?
RC:  The customer has several options to choose from.  
     The Fair Market Value, (FMV) lease gives the customer the lowest payment with two end of lease options.  They can buy if for the true Fair Market Value, (determined at the end of the lease) or return the equipment to Kubota Leasing.
     The Fixed Price Purchase Option, (FPPO) lease has a slightly higher payment, however the exact purchase price is stated at the start of the lease a and the customer knows exactly what their purchase option will be.   At the end of the lease the customer can either buy the equipment for the FPPO or return it to Kubota Leasing.
     These two leases provide off balance sheet financing because the customer has the option to return they equipment if they don’t want to purchase it.
     The third lease is a Finance Lease, which the customer makes payments throughout the term and when the last payment is made the customer takes ownership of the equipment.
•  There are many types of leases available through Kubota Leasing including several customer plans.  
•  However, the main difference when using a lease is that the leasing company is the true owner of the equipment and the end user pays the lease for the use of the equipment for a set amount of time (usually 24 or 36 months) at a set rate per month.  
•  At the end of the lease the customer may have several options, (based on the type of lease agreement) which may include purchasing the equipment  from the lease company, extending the lease, upgrading to newer and/or larger equipment, or simply returning the equipment to the lease company.
GPL:  So why would a commercial operator lease instead of buy?
RC:  There are several reasons why a lease may be a better option for a commercial user.  Some of these reasons are:
•  Lowest monthly cost:  Most lease payments will be less than a payment for a “standard” purchase.
•  Tax Benefits:  In some cases, the customer can deduct the monthly lease payment as an operating expense.  Please check with your own tax advisor.
•  100% Cost Coverage:  A dealer and customer can include “other” fees into the lease agreement including things like training, maintenance, and Kubota Extended Warranty.
•  Obsolescence Protection:  At the end of the lease, the customer has the flexibility to upgrade, downgrade, or simply get a newer model as they see fit.
•  Easier Budgeting:  With 100% cost coverage, a customer can plan much of the operating cost in advance and include those expenses into the lease amount.  This creates better month to month expense planning and allows for maintenance to be paid over time, not as one lump sum.
•  Preserves Credit Lines:  Leasing equipment does not tie up the customer’s line of credit, so the customer will have more credit available if and when they need it.
•  Flexible Payment Options:  Payments can be structured to meet the customer’s needs based on their cash flow needs.
GPL:  If a commercial customer is interested in Kubota Leasing, how can they get more information on it?
RC:  Leasing is fast and easy – we take care of everything call us at 855-222-3955 or visit the Kubota Leasing website at: http://www.kubotaleasing.com, or see Great Plains Kubota at any location, or call 855-4KUBOTA

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