DI 39530.015 Lease/Purchase of DDS Equipment
Lease/purchase agreements provide that some or all payments made for the use of equipment--over a specified period of time may be applied toward the purchase of the equipment.
1. Advantages of lease/purchase agreement
Buyer has option of discontinuing item before purchase.
Vendor bears obligation to replace defective or troublesome equipment with new or improved equipment at minimal or no cost to buyer.
Leased equipment that becomes unserviceable due to amount or cost of repairs can usually be disposed of without further obligation.
2. Interest on borrowing
If equipment is acquired through lease/purchase, interest on borrowing is considered as an unallowable cost--even if allowable under State rules. This includes:
3. Regional approval
The DDS must obtain prior RO approval before entering into a lease/purchase agreement. The DDS must also obtain prior RO approval before converting from a lease/purchase agreement to a purchase agreement.