Should schools be leasing new Apple Equipment rather then buying it?

In the past the words “lease rental’ have been something that can make schools particularly nervous. However, with many schools planning to equip every student with an iPad, the overall cost of these projects means that many schools can’t afford to buy outright. This can make the decision to lease an easy one.

Whilst schools have always wanted to be understandably thrifty, it makes more sense to not buy the iPad outright. Below are just a few of the reasons why (based on a 3 year 1:1 project for example)

• Hardware refreshes after a 3 year cycle for the iPad can be major headache for your school budget on finding money for a whole new set of devices.
• An iPad that is 3 years old may have problems with battery life after many recharges and may not be compatible with newer versions of the iOS operating system and latest apps.
• A large number of 3 year old iPads only represent limited educational or financial benefit to the school.

KRCS work together with our finance partners, Apple Financial Services and strictly follow the guidelines from the Department of Education which state that:
“An operating lease is the only type of lease a school should enter in to. These leases involve the school paying a rental fee for the hire of an asset for a period of time, and are similar to a rental agreement. No other types of lease, such as a finance lease or hire purchase, may be entered in to by the school as this is a form of borrowing.”

So what advantages are there in leasing the equipment rather than buying it outright?

• A well-negotiated operating lease can cost significantly less over two or three years than buying outright – up to 10% cheaper depending on how it is structured. Apple Financial Services can even now offer schools interest free rentals.
• The total cost of the project can be transformed into a fixed rental payment over time, meaning that the school’s cash flow is smoother and the project is then more sustainable. Payments can be made either monthly, quarterly or annually depending on your budgets and how they are set.
• As the costs are fixed it provides reliable and simple budgetary forecasting.
• The assets remain the property of the lease company rather than the school, which simplifies things like what to do with devices at the end of the lease. At the end of the period, the school can choose to either:
• Return the equipment back to the lease company
• Continue to rent the equipment, on a secondary rental agreement
• Purchase the equipment at fair market value, this is the residual value of the equipment after the lease has ended.

The operating lease can also contain additional 3rd party items such as management software, charge cabinets, iPad cases and our Launch Control services to help with configuration of the iPads, for a complete iPad 1:1 solution for your school.

For more information on how KRCS can help you fund your scheme contact us at edsales@krcs.co.uk