If you’re in the market to buy some equipment for your business, you might consider buying the equipment used to save money. Now when it comes to equipment financing, there’s a huge difference when buying from a dealer versus a private party. Both dealership equipment financing and private party equipment financing have their ups and downs. Most business owners don’t realize how making the right decision in the beginning can save them time and money.
Dealership Equipment Financing
When buying from a dealer they have more overhead to consider like paying the salesperson, rent, insurance, etc. So with those added expenses they have specific margins they need to make on each sale. Which is why you will usually see higher prices when buying from a dealer. Some direct benefits of dealership equipment financing, however, include:- Warranty/Guarantee Options
- Paperwork Arranged by Dealer
- Licensed and Insured
- Typically Faster Process
Private Party Equipment Financing
Comparatively, there are some obvious reasons why someone would prefer private party equipment financing. Here are some examples:- Better Deals
- Lower Prices
- Better Maintained
- Less Sales Games & Negotiation
Why Do Private Party Sellers Need to Show Proof of Ownership?
I think you would agree; you wouldn’t want to buy something that could possibly be stolen? If you plan on buying from a private party seller, be prepared to have the seller prove ownership. If the equipment is a non-titled piece of equipment there are several ways for the seller to prove ownership. Depending on which program you are qualified for, these are the different ways the seller can show proof of ownership:- Original Paid Purchase Invoice from the dealer/vendor
- Copy of an older insurance certificate showing the equipment and the serial number
- Proof of Payment, cleared check, wire transaction being paid to a dealer/vendor
- UCC lien release and a payoff letter from the finance company showing the equipment being paid off
- Previous year’s tax return that shows the equipment & serial number being depreciated on the seller’s taxes