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Using garage finance to invest in the best diagnostics kit

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They say that it takes years to build a good reputation and seconds to lose it, and this is never truer than in the garage trade.

Although the simple stuff is meat and drink to a good mechanic, the trickier problems can cause customers to lose faith in their local workshop and seek to look elsewhere.

Having the best kit is important. After all there can’t be a mechanic alive who hasn’t used cheap diagnostics only to find that they are getting little information and in some cases being told entirely the wrong thing.

It would be wrong however to say this is simply a method of avoiding the loss of customers. With the increase in DIYers, the ability to offer top line diagnostics checks is a potential new income stream with tuning and remapping also a valuable revenue earner.

This of course all comes at a price. Often it will be a case of buying the kit but also getting it installed and calibrated correctly and even arranging for training on the new and complex diagnostic set up.

How to finance it

A good garage diagnostic set up will feature regular software updates that will allow it to stay current. However, a workshop is a tough environment and it is likely that you’ll want to change every three to five years or so.

It’s important that your finance takes this into account.

The first method is to take a short to medium term fixed loan. This will feature set payments and allows accurate budgeting and from the very beginning the equipment belongs to the garage owner.

This could be arranged as a personal loan, a loan to the business or a specific loan which is secured on the asset.

An alternative to this is to look for a Lease or Hire Purchase option.

In this case the equipment doesn’t belong to the garage but instead they pay set payments to essentially ‘hire’ the kit for the period of the agreement.

In some cases, there may be an option to purchase at the end of the term and this will vary from being just a nominal payment to a sizeable balloon payment of up to half the value of the equipment.

A loan or hire purchase or a finance lease will all be more expensive monthly as they are designed to pay off the full value of the equipment over the term. An operating lease will often be cheaper as the user will only be paying off half the value in some cases.

Clearly if you are intending to change the equipment at the end of the term then it makes no sense in looking at a product that allows you to keep the kit at the end of the term and charges you accordingly.

There are a lot more aspects to setting up your garage finance than simply the monthly payments, so it is important to make sure you take advice from someone who has a number of different products to offer and will be able to match the product to your particular needs.

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