Policies and Procedures
Policy 1280 – Equipment Rental or Lease
July 1, 1995
October 6, 2014
October 6, 2014
Director of Purchasing Services
Although there is no specific rule prohibiting it, the State and thus the University usually does not lease or rent equipment as purchasing is generally regarded as more economical.
It may be desirable to rent equipment in certain circumstances such as:
- The initial cost of some equipment can be so great that it may be more viable to rent for an indefinite time period.
- Updated versions of certain types of equipment are constantly placed on the market making it unwise to invest large sums in equipment that may soon be obsolete.
- Evaluation of certain equipment can be made without the long term investment that purchasing would entail.
Rental and lease agreements are similar. A lease agreement typically has more formal terms and conditions and is for a specified term. A rental agreement is less formal, extends for an indefinite period, and can be terminated by the renting party giving due notice. Rental/lease contracts should not include any intent for ownership.
A lease/purchase agreement (installment buying agreement) is normally entered into with the intent of eventual ownership. Lease/purchase agreements are normally for a definite period of time (e.g. one to three years) and cannot be cancelled without significant financial ramifications. Decisions on a lease/purchase agreement require reasonable lead time as in most cases, and a contract needs to be negotiated with a third-party financial institution.
Department requests for a rental/lease or a lease/purchase agreement should be submitted to Purchasing Services on a requisition with a memorandum justifying the rationale for leasing rather than an outright purchase, including a copy of the proposed agreement.
Reason for Policy
This policy conveys the requirements for the rental or lease of equipment.
- 1226.1 - Creating a Requisition
Frequently Asked Questions
Q: Are all company's lease agreements acceptable?
A: No. Most standard lease agreements contain terms that cannot be accepted by the University. All lease agreements must be reviewed and signed by Purchasing Services.
Q: Do state-term contracts have provisions for a lease?
A: Yes, some State contracts include terms for rental or lease. For example, some copiers can be rented or leased under the State contract.
Q: Are there options to leasing other than the manufacturer's leasing company?
A: Yes. Third-party leasing companies are another option for leasing equipment. Consult with Purchasing Services to discuss your needs.
Q: How long can equipment be leased?
A: Most leases run between 24 and 60 months depending on your own individual department's needs.
The State of North Carolina Division of Purchase & Contract G.S. 143-49 (1), (2); 143-53 (5)
|Rental or lease of equipment||Purchasing Services-Goodsemail@example.com|
October 1, 2014: Revised naming of requisitions.
September 20, 2010
November 18, 2003