Should I Rent or Buy C-Arm?  What about leasing?

One of the biggest questions that comes up when you first realize you need a C-Arm in your office is what kinds of C-Arm you want.  And then once you figure out how much the C-Arm you want costs, often more than expected, then the question sets in:

Should I Rent or Buy C-Arm?

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This is a very popular question for many doctors, and a valid one.  My suggestion is simple & straightforward whether it’s for C-Arm or Car.  Buy if you plan on keeping it for years, Rent if you’re not sure if you will keep it for more than a year.

Before going into details of Buy or Rent, I’d like to point out that Leasing in medical devices has a different meaning than for cars.  For cars & other parts of our lives, Leasing essentially means a long-term rental where we give the car back to the leasing company, usually a bank.  But for medical devices, leasing is just a financing term we use, if it was correctly structured.

Leasing has a certain business tax write-off advantage, which gives doctor’s offices, a business, a way to get the best possible tax write-off for the year.  So in a typical medical device leasing, it’s structured with a $1 buyout, which means you literary pay one dollar at the end of the lease, and the equipment becomes yours.  And yes, you do have the option of not paying the final dollar and returning the equipment to the bank, if you choose to.

More questions? Here’s more details on Equipment Financing.

 

Rent or Buy C-Arm (aka Renting vs Leasing/Financing)

When renting a C-Arm, an average rental cost is around $2,500 to $3,500/month.  The biggest advantage of renting a C-Arm is that it comes with support, meaning if there is an issue with the C-Arm, the rental company is on the hooks to get it repaired.  And this is important since most rental fleet units are older & refurbished systems.

With financing or leasing, a popular refurbished or Brand NEW C-Arm (similar to rental units above) would cost around $1,000 ~ $1,800/month.  While monthly cost is lower, and these units are either New or recently refurbished, you are on the hook for the entire term of the financing, typically 60 to 84 months as well as maintenance of the system.

Remember how I mentioned rental is good for the shorter term?  This is why: Monthly rental fee is 2~3 times that of leasing/financing payment.  And when you rent, at the end of the term, you have to give the machine back while with financing, you’ll own your unit at the end.  So in most case scenarios, buying/leasing/financing would be a better deal in the long term.  However, there are exceptions.  If you are starting a brand new office or brand new partnership and you would like to have a chance to confirm proof of concept through a 3~6 months trial, renting a unit would make more sense even at a higher monthly cost especially if you’re not the one using the C-Arm. (If a facility would pay to provide C-Arm to a doctor who’s coming into the practice)

 

Not 100% sure?  In a unique situation?  Comment below.  Would love to hear your thoughts on how you’d make your purchase decisions…

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