If you are looking to buy an asset, the most common options are Dealer Sales and Private Sales. However if you have already purchased an asset but have decided that it would be better for your business to hold onto your working capital, then a Sale and Buy Back might be the right option for you. The various options for purchasing assets will be explored in this article.
When purchasing from a licensed supplier you can purchase new or used assets.
Advantages of purchasing through a Dealer
• You can see and compare various assets in one location
• They are your only option if you want to purchase something brand new
• You can purchase extra accessories or attachments from them directly
• You have the assurance that there will be no money owing on the asset and that you will obtain clear title
• You may have the option to trade in your existing asset if you are upgrading.
Disadvantages of purchasing through a Dealer
• Price may be higher on newer assets as there may be less room for negotiation
• It may take longer to get your hands on an asset if it is out of stock and needs to be ordered in.
When purchasing through a private seller you will be purchasing used assets directly from an individual or a company owner.
Advantages of purchasing through a Private Seller
• You may be able to obtain a cheaper price because the asset is used and there is more room for negotiation
• If you are shopping with a specific budget in mind you won’t feel pressured into buying optional extras with a private seller.
Disadvantages of purchasing through a Private Seller
• Private sellers aren’t required to guarantee clear title on the vehicle they’re selling. This means that the responsibility of making sure that there isn’t any money owing or that it hasn’t been written off falls on you
• It can be more time-consuming than buying a car through a dealer because you can’t compare multiple vehicles in the one location
• You won’t be able to buy a new asset privately
• It may cost you more in the long run as you may need to pay for asset inspection reports, registrations transfers and roadworthy certificates.
SALE AND BUY BACKS
A sale and buy back occurs when you have purchased an asset from either a dealer or private seller in cash and decide later that you would like to finance the asset instead.
Advantages of Sale and Buy Backs
• Enables you to purchase equipment quickly to secure the asset, whilst allowing you to be reimbursed for the purchase at a later stage
• The funds can be used for working capital purposes or for asset repairs
• The funds are paid directly to your bank account which enables you to have control on how the funds are used.
Disadvantages of Sale and Buy Backs
• Lenders may require more paperwork for these transactions as you need to prove that the funds were paid in full for the asset you purchased
• Some lenders will only allow Sale and Buy Backs if the asset was purchased within a specific time frame.
To find out more about financing your next asset purchase contact the team at Credit One on (07) 3340 6730 or visit www.creditone.com.au