A Survey of Lease Purchase Models Used by Lessors

Abstract

It is evident that the lease versus purchase (sell) problem is both complex and multi-faceted. Thus, the purpose of the study was to analyze one basic aspect of the problem -- the lease models being used by lessors in pricing and marketing their financial leases. The proposed study focused on the following research questions: (1) What are the economic and non-economic benefits of leasing from the standpoint of the lessor? (2) What type of decision process is used by the lessor in analyzing leases? (3) What analytical methods are used in making lease versus sell decisions? (4) What factors are most influential in the lessor's decision process? A majority of the research questions will be answered using data from secondary sources. A majority of this project will emphasize questions (3) and (4). In addition to the secondary sources of data, a survey questionnaire will be sent to 75 leasing companies selected out of Standard and Poors "Million Dollar Book". The survey design and methodology are described in the final section. This study will emphasize industrial leases. The second major objective of the research is to identify the means by which lessors market their leases.