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The case for leasing computers

Tough economic times translate to better leasing deals.

Forget everything you’ve heard about the credit crisis, foreclosures, and the stalling national economy—there has never been a better time for a school to lease computers. The computer-makers and the companies that set up the leases are so hungry for business that they’re willing to wheel and deal. Advantage: Buyer.

“We’ve leased computers and bought others,” recalls Connie Kampschmidt, the assistant principal and curriculum director at McAuley High School, a Catholic girls’ school in Cincinnati. “But our tablet lease is the best deal yet.” Starting this fall, each of McAuley High’s 200 incoming freshmen will get a leased ThinkPad X61 Tablet to use until they graduate. Teachers at McAuley already use tablets, trading in their notebooks for the ThinkPad X60 in 2007. This way the teachers grew accustomed to the devices before they landed in the students’ hands.

Leasing is a win-win for schools. It reduces the capital costs of a computer deployment, spreads out payments, and helps with cash flow. Schools can periodically renegotiate the lease for newer equipment and possibly lower payments. In an increasingly popular twist to conventional leasing, the school doesn’t even pay the bill. Rather, the school negotiates and sets up the lease contract, but depends on parents to pay the yearly fee. For McAuley High, this means that on top of the school’s $7,775 annual tuition fee, each student’s family pays $600 a year for the computer lease. “We wanted to spread out the cost of the computers for the parents,” Kampschmidt adds.

The $600 buys a lot. At the start of the school year, each freshman gets a new ThinkPad X61 Tablet and a bag from InfoCase, as well as accidental damage insurance and a warranty extension that brings coverage up to the four-year lease term; the system’s software includes Windows XP and Office 2007. As each new class starts school, its members will be added to the lease. By the fall of 2012, the school will have about 800 leased tablets.

When most leases end, the provider typically gathers up the computers to refurbish and sell them. The McAuley High program is different because at the end of the lease’s four-year term, the graduates can buy their computers for $1—making this an innovative hybrid between a lease and a time purchase plan.

For the tablets, McAuley High went to CDW-G. Two months after starting discussion on the different types of computers and leases, the agreement was ready to roll. “Leasing is becoming an increasingly popular way for schools to outfit their students with notebooks,” says Palmer Pierson, account executive at CDW-G. “We worked with McAuley and structured the right deal to get the systems into the students’ hands.”

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