Ownership Risks

Formal

The risks of ownership over and above renting or leasing.

1) Why own an asset for the whole of its useful life when you only need it for a period?
2) Let a rental partner maximise its second hand value - that’s not our core business
3) Use the cash from purchase for working capital to expand business faster.
4) Tax breaks exist for leasing.

Real-world Example

A company that owns its delivery vehicles outright bears the risk if they lose value faster than expected, need unplanned repairs, or become obsolete - risks that a rental or leasing company would otherwise carry.