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I was thinking about this the other day. Given that the price of some audio equipment is the same as the price of some automobiles, wouldn't it be nice if we could lease equipment like you can lease cars? I don't recall ever seeing such a service, though perhaps it already exists. To me, it would certainly allow more experimentation with equipment so that one could test out different components for extended periods of time in an existing system.
Shipping would seem to be a problem, as would wear and tear on equipment, I suppose. But it would be an interesting option.
Follow Ups:
Ok, Not Costco. But decades ago I floated the idea to a now defunct dealer in the LA area for him to offer a subscription service that would provide him added income, that would retain a stock of gear, that would be administered as rental equipment to it's members. The Idea of a hi-fi club buying equipment at retail was prohibitive. This would allow the dealer get the equipment in at prices way below retail, Members "rent the equipment at reasonable rates, and can get rights to purchase the gear they rent at the "Club" price. It would have to be handle as demonstrator gear - depreciated and maintained. That administration cost is part of what the Club Dues were for.
This was way before internet and forums and ... so from a marketing perspective I would guess is would have even better chance of success now.
Note: there is a model where this could work as a non-profit organization also.
Anybody for the Audio Asylum club?
"The hardest thing of all is to find a black cat in a dark room, especially if there is no cat" - Confucius
axiom to work very, very well:
reelsmith's axiom: Its going to be used equipment when I sell it, so it may as well be used equipment when I buy it.
Budget's a budget: Can't afford to lease a Ferrari; can't afford to lease MBL.
"Once this was all Black Plasma and Imagination" -Michael McClure
where you pay a premium fee (per person) and listen per hour.
Preferably after hours when all's quiet (with an employee on duty).
Obviously as the owner a lot of factors come into play in determining 'admission' cost: insurance coverage after hours, utilities, salary, potential equipment damages etc.,.
Given the guideline below of a $80K car lease at $1200; a room with a $200K stereo would run you about $85 per day. I think half that per hour would be reasonable; weekends higher.
1. When you lease a car, you are functionally borrowing: instead of borrowing the whole cost of the car, you are borrowing the projected amount that the car will depreciate over the lease term. Makes sense for some, not for others. But, as has been pointed out below, it only works if the leasing company can accurately assess the rate of depreciation. With a big, liquid market like automobiles, that works. With a small specialty market like high end audio, it probably doesn't.
2. Two of the key factors in the car leasing market are (a) a lot of people have to have cars and have tight monthly cash flows, so leasing is a good budget tool for them, and (b) some taxpayers get a better tax treatment for leased vehicles than owned vehicles. Neither of those factors applies to audio.
Happy listening,
Jim
"The passage of my life is measured out in shirts."
- Brian Eno
Leased a very nice 4-Runner years ago. Every time I drove it, the feeling that I was "borrowing Daddy's car" reared its ugly head. When we turned it in a few years later, we bought a new 4-Runner. If we learned anything from the lease, it was that we discovered a great vehicle....at least for our needs. Audio equipment is not in the same essential needs category. I buy what you can afford.
Oops....should be "I buy what I can afford."
As Jim said, leasing is just another form of financing, or borrowing. One should never go into debt for their audio system! If you can't pay cash, don't buy it!!
I am in the car business and I lease out high end luxury cars everyday. Been doing it for over 30 years now. They range in price from a low of $50K to a high of $125K. I think it is a fair assumption to make that audio equipment will have a depreciation schedule similar to if not steeper than these cars. A three year lease on an $80K car runs about $1200/month (give or take)with no downpayment. So now we have the MAXX 3s. But we still need the Ongaku and the Caliburn and the Ortofon Anna and the Odin cables,etc., etc. Do you really want to stare a $5000/month lease payment for a STEREO in the face every month??? It's one thing to write a one time check and tote the filthy lucre home every coupla years but I cannot think of a more vicious reminder of how ludicrously expensive this "hobby" is than to have a monthly statement of this magnitude popping up in the mail every month.
is the recovery factor.Nearly impossible -if not expensive, to remove an item within someone's home once it falls into default status.
Ask any Rent a Center employee.
Edits: 08/04/15
Typically, those most likely to "default" are those whose credit scores are most apt to preclude them from qualifying for leasing in the first place. Just sayin'.
nt.
...The terms of a lease are all negotiable.
Things like the percentage of the purchase price, if any, of the deposit.
The length of the lease in years & months.
The sum of or percentage of the residual payable on conclusion.
The type of and terms of insurances covering the item leased.
Terms of use of the item.
Leasing and renting are not the same.
Leasing is usually only viable when the payments are tax deductable, otherwise a loan is a more viable option.
A simple example;
A $30K amplifier.
No deposit.
Interest rate say, 5%
Lease term of 48 months.
Balloon payment/residual of 40% = ($12K)
Monthly lease cost of $463 per month. ( + the amplified would need to also be insured)
So in the above scenario you get to use the $30K amplifier for 4 years at cost of $463 per month (plus insurance, though I assume folks insure the audio gear anyway)
At the end of the four years need to pay $12K IF you want to KEEP the amplifier for yourself.
OR you, or the leasing company, sell the amplifier to pay the residual. Will a $30K amp sell for $12K after four years?
IMHO the above scenario is only viable if the payments are tax deductible and I suspect for most people they will not be.
Considering some people purchase consumer goods on a CC and pay them off over years, it maybe be a cheaper option for some to lease.
Smile
Sox
Think of it simply as paying a monthly service fee for hearing proper audio. End of term,
Send it back for a new contract, and new rig.
Overage mileage charge based on how worn the 10k Lyra stylus appears that is on the uber table.
Seems like it would be a huge loss for the lessor. Resale of returned equipment depending on age, is quite low. You would go bust in no time. Shipping charges would be a huge expense as well.
I can't imagine any sort of business model working here.
Not being a finance guy, I never had a good grasp on leasing, residual value, lease rate, etc. If I don't understand it in detail, I don't want it. I can do the calc on a simple loan but leasing scares me away!
After learning my lesson in my youth on the dangers of credit... and taking years to dig my way out, I now maintain zero consumer debt and work to keep it that way. Everything is paid off or gets paid off within a billing cycle.
Who determines the residual value on a piece of audio gear? That would be a big factor in determining a good lease, wouldn't it? I wonder if you need to buy gap insurance on leased audio gear in case you break it?
The company leasing out the product determines the residual.Essentially with leasing, you are paying for depreciation without being committed to the full purchase price of the item.
Taxes and interest are are only applied to the lease, not based on the full purchase price. This yields a bit of savings.
Leasing has it's place for, example a commuter who wants a new vehicle every couple of years and just wants to upgrade the vehicle easily.
Somebody who finances the whole car is usually negative equity at that point in time and finds it difficult to trade in.Technically a lease is a little safer, if the market for the item is worth less then the residual at the end of term, you just hand it in. If it is worth more, you have the potential to profit off the residual.
That being said, I too avoid using credit. Material things are much more enjoyable when you own them.
Audio Illuminati
Edits: 08/03/15
I have never had credit issues, and I agree with you that one should avoid credit problems.
But imagine, instead of leasing, what if you could simply rent a piece of equipment. I could imagine, for example, renting a pair of Maggie 20.7 speakers for a few months to see what they are like in my system.
And what if the amount you pay for renting, or leasing, could be applied to purchasing the product? So, for example, if I really like the 20.7s, I could go ahead and purchase them after renting them for several months.
.
....but vinyl is quite a small market these days, and yet there are very large number of turntables being marketed.
Count me in.
Our recording studio leased most of our big ticket items.
Alan
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