Should you rent or purchase medical equipment

When it comes to the healthcare system, medical equipment is an inseparable part. All practices and treatment heavily depend on the kind of machine or tools used. Fortunately, India has emerged as a much better medical facility over the last couple of decades. Several advancements and the introduction of new equipment have made things easier for patients as well as healthcare professionals.

If you also want to settle any advanced equipment in your clinic or hospital, you must evaluate a few factors beforehand. Depending on your budget, objectives, and utility, you can choose between buying or renting the machine.

In this blog, we will be discussing several factors that will help you make the right choice. Also, we look at how Hero FinCorp Personal Loan can help you achieve your goals with quick monetary aid.

What You Need to Consider Before Deciding to Rent or Purchase Medical Equipment

Here are a few important things that you should consider before making the final decision:

• Requirement: The first and most important thing is to assess your requirement. Evaluate what sort of expansion you need and make investments based on it only.
• Cost Efficiency: It is also important to evaluate the post-purchase expenses. Also, analyse if the purchase or renting will be cost-effective for you or not.
• Utilisation: In alignment with the above point, utilisation is a crucial aspect. You need to assess how frequently you will be using the machine. Depending on this, you can make a decision if you actually need the equipment or not.

Rent vs Buy: A Detailed Cost Analysis of Medical Equipment

The decision between buying or renting will definitely impact the final usage cost of the machine. Here are a few essential points that you can consider to determine whether you need to buy the equipment or if renting can be a better option:

Upfront Cost

When renting medical equipment, you only need to make lower monthly or yearly payments, avoiding a large initial investment. On the other hand, buying equipment requires a significant upfront payment, which may strain your budget but can be more economical in the long run.

Payment Terms

Rental agreements often involve regular payments, either monthly or yearly, which can help spread out the financial burden. Purchasing equipment typically requires full payment upfront or via financing, meaning there are no recurring payments once the purchase is complete.

End of Term Options

With renting, at the end of the term, you can return the equipment, renew the rental, or sometimes purchase it at a discounted rate. Buying means full ownership, and the equipment is yours indefinitely, but you cannot return or upgrade it easily without additional cost.

Maintenance Costs

One important factor to consider when deciding whether to rent or buy medical equipment is the maintenance cost. Leased equipment often comes with maintenance included, so you’re not responsible for repair or service costs. In contrast, when you purchase equipment, you are responsible for maintaining and servicing it. This can lead to higher long-term costs, especially for complex or specialised equipment.

Read Also- A Complete Guide to Medical Equipment Financing

Flexibility

Renting offers greater flexibility than buying, especially for healthcare providers with changing needs. For example, if your practice expands or requires different types of equipment, renting allows you to switch or upgrade equipment without long-term commitments. On the other hand, purchasing medical equipment locks you into that particular model for longer.

Ownership

Renting provides no ownership; you’re essentially borrowing the equipment. Buying gives you full ownership of the equipment, allowing you to use it as an asset and possibly sell it later or use it as collateral for future financing.

Tax Benefits

Rental payments are typically operational costs, so they don’t offer specific tax advantages. In contrast, buying medical equipment allows for tax deductions based on depreciation, which can reduce taxable income over the equipment’s useful life.

Customisation

Renting limits customisation, as the equipment must meet the available options and specifications. When you buy, you can fully customise the equipment to suit your specific requirements, making it ideal for long-term use and tailored needs.

The Role of Technology Evolution in Renting vs Buying

The rapid evolution of technology is a key consideration when choosing between renting and buying. Medical equipment, like any other technology, becomes obsolete over time. Renting provides the flexibility to upgrade to newer models at the end of the lease term, ensuring your practice has access to the latest technologies. In contrast, if you buy the equipment, you may be stuck with outdated technology unless you decide to invest in upgrades.

Renting Advantages:

• Stay up-to-date with the latest technology
• Avoid depreciation costs
• Flexibility to upgrade regularly

The Benefits of Loans for Purchasing Medical Equipment

While renting can be a good option for short-term use or for keeping up with technological advancements, buying medical equipment through a loan offers an alternative for those who want to own the equipment long-term. Hero FinCorp Personal Loans for Medical Equipment are designed to provide financial assistance with competitive interest rates, making it easier to manage your healthcare facility’s equipment costs.

Advantages of Personal Loans for Medical Equipment:

• Competitive interest rates
• Flexible repayment terms
• No restrictions on equipment usage or modifications

Conclusion

There is no right or wrong option here, and it all depends on the financial capability of the user. Both purchasing and renting medical equipment have their own advantages and disadvantages.

Getting medical equipment on rent is a suitable option for those with limited financial means and who find it difficult to get a loan. However, purchasing medical devices on rent becomes expensive in the long term. You also need to incur a fixed monthly cost towards it.

On the other hand, when you purchase medical equipment, you do not just own that machinery but also become part of your capital assets. In the long term, the cost of ownership is lower, and you can also get a tax rebate on a medical equipment loan.

There is also the fact that buying medical equipment through a loan saves you from some tough negotiations with the renting agency.

Frequently Asked Questions

1. What are the key benefits of renting medical equipment?

Renting medical equipment offers lower initial costs, access to the latest technology, and included maintenance services.

2. Is buying medical equipment a better option for long-term use?

Buying is generally better if you plan to use the equipment long-term and want to own it outright. This option also provides potential tax advantages.

3. Can I apply for a loan to purchase medical equipment?

Yes, loans like Hero FinCorp's Personal loan for Medical Equipment provide financial support for purchasing medical equipment with flexible repayment options.

4. What happens at the end of a medical equipment rent?

At the end of a lease term, you can either return the equipment, renew the lease, or sometimes purchase it at a discounted price.

5. How does renting medical equipment affect my cash flow?

Renting medical equipment helps preserve cash flow by spreading the cost over time, making it easier for your healthcare practice to maintain a steady financial position without large upfront investments.

6. Can I upgrade my rented medical equipment to newer models?

Yes, renting allows flexibility to upgrade your equipment at the end of the rental term, ensuring your practice stays current with the latest medical technologies.

Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available during writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Before making any decisions, readers are advised to independently verify any details mentioned here, such as specifications, features, and availability. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader's discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.