Should You Lease or Buy a Commercial Dishwasher?

As a business owner, you know that having a reliable dishwasher is essential to keeping your kitchen running smoothly. But when it comes to acquiring one, should you lease or buy? While both options have their advantages, it's important to consider the long-term impacts on your business. We'll explore the pros and cons of each option to help you make the best decision for your business.

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Commercial Dishwasher Lease vs Buy

Choosing between leasing and buying a commercial dishwasher can be challenging, as it depends on your business's budget and specific needs. Leasing offers a lower upfront cost and flexibility for upgrade options while buying provides tax deductions and long-term savings. Leasing may lock you into chemical contracts and buy-out fees. Buying allows you to find the most technologically advanced models that hold resale value. Ultimately, the decision to lease or buy your commercial dishwasher will depend on your budget, needs, and preferences. Consider the upfront costs, tax deductions, and available technology when making your decision. Take a closer look at the details of leasing a dishwasher compared to buying one below:

Commercial Dishwasher Leasing

If you're in the market for a new dishwasher, one option to consider is leasing. There are various benefits and downsides to consider before signing a contract to ensure that leasing a dishwasher is the right choice for your business.

Pros to Leasing a Dishwasher

Man Loading single rack commercial dishwasher

Leasing a dishwasher can offer a number of benefits over purchasing one outright. Here are some of the top pros to leasing a dishwasher:

  • Lower Upfront Costs: Leasing a dishwasher can be a more affordable option than purchasing a unit. With a commercial dishwasher rental, you'll typically pay a monthly fee rather than a large upfront cost. This can be especially helpful if you're working with a tight budget or need to conserve your cash flow.
  • New and Unused Equipment: When you lease a dishwasher, you can be sure that you're getting a brand-new and unused machine. This means you won't have to worry about any wear and tear from previous owners.
  • Maintenance and Service Included: When you lease a dishwasher, your contract will typically include maintenance and service. This means that if anything goes wrong with the machine, you won't have to worry about finding a repair technician or paying for repairs out of pocket. Instead, the leasing company will take care of all necessary maintenance and repairs.
  • Flexibility: Leasing a dishwasher can offer more flexibility than purchasing one outright. With a lease, you can often upgrade to a newer or more advanced model at the end of your contract, rather than being stuck with an outdated machine. Additionally, if your business needs to change or you need to relocate, you can often transfer your lease to a new location or business.

Cons to Leasing a Dishwasher

woman loading undercounter glassware dishwasher

While leasing a dishwasher may seem like a convenient option, there are some downsides to consider before signing a lease agreement. The following are some of the cons of leasing a dishwasher:

  • Energy-Inefficient Equipment: Through a leasing program, you may not have access to the latest or most energy-efficient dishwashers. This means you could end up paying more in utility and chemical bills and not benefitting from the latest technology.
  • Sub-par Service and Delays: Most leasing companies will reach out to a technician for you should your machine need maintenance. However, you may end up with service companies that are not authorized by the manufacturer of your unit. This also means that you’ll need to wait for the leasing company to operate as the middle-man to the service company, leading to longer downtime, which can be detrimental to your business.
  • Higher Insurance Premiums: Leasing equipment can require higher insurance premiums. This is because the leasing company may require you to have a higher level of coverage to protect their investment.
  • Markup on Chemicals: Some leasing companies may require you to use specific chemicals, which can come at a markup and the price may increase over time without clear indication in your contract. You may also be locked into purchasing a minimum amount regardless of if you need it or not. This can add up over time and increase your overall cost in the long run.
  • Buyout Fee: If you decide to return the equipment before the lease term is up, you may be subject to a buyout fee. This can add an unexpected cost to your budget.
  • No Tax Write-Offs: Leased equipment is not eligible for advantageous tax write-offs or deductions, which could impact your bottom line.

Buying a Dishwasher

Although leasing a dishwasher may seem like a cost-saving tactic, it may not be the best fit for your business in the long run. We’ve created a pros and cons list for owning a commercial dishwasher.

Pros to Buying a Dishwasher

Dishroom worker sending rack of dishes through a pass-through dishwasher

When it comes to purchasing a dishwasher for your business, there are several pros to consider:

  • Long-Term Savings: While the initial cost of purchasing a dishwasher may be higher than leasing one, in the long run, buying your own machine can save you money. You won't have to worry about monthly lease payments or chemical fees, and you'll own the equipment once it's paid off.
  • Choose Your Own Service Company: When you own your dishwasher, you have the freedom to choose your own service company. This means you can shop around for the best prices and quality of service, rather than being stuck with the service provider chosen by the leasing company. You also cut out the middleman and can schedule service appointments when they are most convenient for you.
  • Tax Benefits: Many dishwashers, especially energy-efficient models are eligible for tax deductions depending on the state. Leased units do not qualify but when you buy a dishwasher, you may be able to claim depreciation on your taxes and reduce your taxable income.
  • No Long-Term Contracts: When you lease a dishwasher, you're typically locked into a long-term contract or subject to buyout fees. But when you buy your own dishwasher, you have the flexibility to sell it or upgrade it whenever you want, without being tied down by a contract.
  • Purchase Up-To-Date Models: Leasing companies may not always offer the newest and most advanced dishwashers on the market. When you buy your own dishwasher, you can choose the latest and technologically advanced models, with features like ventless capabilities and Wi-Fi connections, that meet your specific needs.
  • Choose Your Own Chemicals: Owning your own dishwasher also gives you the freedom to choose the cleaning chemicals that work best for your business, rather than being limited to the options provided by the leasing company.
  • Resale Value: If you own your dishwasher, you have the option to sell it later on if you no longer need it or want to upgrade to a newer model. This can help you recoup some of the initial cost and put that money towards a new dishwasher or other business expenses.

Cons of Buying a Dishwasher

person putting a cup in Carousel Type Underbar Glass Washer

Purchasing a commercial dishwasher is certainly an investment and many business owners experience sticker shock as they shop for one. Here are a few cons to buying a dishwasher instead of leasing one:

  • Upfront Cost: The most obvious downside to purchasing a dishwasher is the high upfront cost. Depending on the model and features you want, a dishwasher can cost anywhere from a few hundred to several thousand dollars. For some businesses, this cost may be too much to handle all at once.
  • Insurance Cost: If you purchase a dishwasher, you'll likely need to insure it against damage and breakdowns. This can add an extra expense to your budget that you might not have considered.
  • Preventative Maintenance and Repairs: Over time, your dishwasher will need regular maintenance to keep it running smoothly. This can include things like cleaning, replacing parts, and repairing any damage. If you own your dishwasher, you'll be responsible for scheduling service calls and covering these costs.

Deciding whether to lease or buy a dishwasher comes down to your business's specific needs and financial situation. If you don't have the budget to make a large purchase upfront, leasing may be the easier option. However, if you are a franchisee or already have a well-established business, buying a dishwasher may be the better investment due to its longevity. In the long run, purchasing a commercial dishwasher outright is considered to be more cost-effective than leasing. If you are ready to make the investment, you can use our commercial dishwasher reviews to aid your search for the perfect unit for your business.

Posted in: Management & Operation|By Janine Jones
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