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How does Fitness Equipment Leasing Work?

By Adrien-Luc Sanders
Updated Feb 03, 2024
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Fitness equipment leasing allows the long or short-term rental of workout equipment as an alternative, or a precursor, to purchase. Many fitness equipment retailers offer a lease or lease-to-own option for both home and commercial workout equipment. Lease lengths and terms may vary depending on the quality, purpose, and supplier of the equipment. Some people use leasing as a financing alternative to purchasing, especially for more costly commercial equipment.

There are varying types of fitness equipment leasing plans. Some, such as the fair market value (FMV) plan, offer flexible terms with lower monthly payments. Fair market value usually provides options at the end of a lease term, including purchase, lease extension, or lease termination and equipment return. The $1 buy-out plan is an option for those with definite intent to purchase. While payments are usually higher than other plans, at the end of the lease term lessees can buy the equipment for $1 US Dollar (USD).

Another common type of leasing plan offers mid-range payments and terms that fall between the FMV and the $1 buy-out plan. This type of plan typically allows the option to either buy or return the equipment at the end of the fitness equipment leasing plan. Purchase price is set at a fixed percentage of initial equipment cost, usually 10%. Individual fitness equipment retailers may also have unique plans specific to their business model and products.

Leasing offers multiple benefits. A lease defrays the initial cost of investment in fitness equipment, which allows lessees to use and own workout equipment they may not be able to otherwise afford. In the case of gymnasiums and fitness centers, fitness equipment leasing can drastically reduce initial start-up costs incurred by purchasing equipment in bulk. For high-use facilities that have to replace broken or outdated equipment often, leasing saves money by allowing them to only pay for the equipment use, rather than losing the full cost of expensive equipment each time it breaks or becomes obsolete. Some leasing agreements also structure payments in ways that can be claimed as tax write-offs.

While fitness equipment leasing can cost less in the short term, long-term costs may exceed the value of the equipment. Between accumulated payments and interest, the full term of a lease may end up costing significantly more than either market or retail value. This can be especially true in terms of rent-to-own plans that offer periodic payments for a certain term prior to a fixed final purchase cost. If the equipment becomes obsolete during the lease period, market value can also decrease to well below the accumulated cost of the lease.

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