Purchasing vs. Leasing Commercial Dishwashers

Is it really a good idea to lease a dishwasher?

Dishwashers are one of the most important, yet expensive items that are necessary in any foodservice establishment that utilizes dishware, whether a restaurant, school cafeteria, hospital or large church. Most foodservice operators may choose to lease a commercial dishwasher over owning one because the idea of renting a piece of equipment seems more appealing, and the idea of owning sounds too risky.

When leasing or buying a commercial dishwasher or warewasher, there are advantages and disadvantages to consider. The pros at ACityDiscount recommend looking at both of your options in detail to make the best decision for your business over the long term. Things like the cost to lease (meaning the interest rate you will have to pay), insurance costs (some leasing companies require this) and chemical lease costs require careful consideration.

Basically, how most equipment leases work is the leasing company provides the machine, agrees to fix it if it breaks and includes maintenance as part of a lease contract. While most think they are getting these services for free, they really aren’t.

Like a car lease, the lessee, or business that is renting the equipment makes a small deposit and pays a monthly fee to rent the equipment until it is paid off in full. The extra rental fees often include maintenance and insurance costs, and the leasing company maintains full ownership of that equipment until the lease is paid in full. So, you may end up paying more for that machine over time.

The high cost of expectation

While some may think that they are protecting their business from overspending, high maintenance costs, replacements, etc. by entering a lease agreement, they may be setting themselves up for a rental nightmare. Dishwashers require chemical detergent to get dishes and glassware as clean as possible. Leasing companies are aware of this.

Upon entering a lease agreement, you may start out with a great price of $11 per gallon for your detergent, but over time that price may rise without you even noticing it. Before you know it, the price has doubled; because paying the bill is a monthly chore, you may not even notice the bill went up, and you might get stuck with more detergent than you can realistically use.

One foodservice blogger posted about a commercial dishwasher that he was renting from a well-known leasing company. He said that he received a bill for $78.17 with the statement, “minimum purchase not fulfilled” on it. When he called to ask what it meant, he was told that the restaurant was required to purchase the minimum amount of chemicals per month whether they needed them or not. In his blog he states, “Maybe I should just charge all our customers for all the pie I think they should be eating this month, whether they want it or not.” Pretty great analogy, right?

Let’s look at the numbers. Dishwashers usually use 3 gallons of detergent per month and the average cost per gallon is $11, so the average spend on detergent is $33 per month. The average chemical lease per month is $78-$300 and an average monthly rate for a 60-month lease contract is $204, which adds up to almost $17,000 on the low end. The average door-type dishwasher is anywhere between $5,000 to $15,000, depending on the type. So, owning a dishwasher could save you thousands of dollars down the line.

Another issue when it comes to leasing equipment is quality. A foodservice equipment manufacturer representative for CGA notes that many leasing companies use low-temp dishwashers or dishwashers that do not have the most up-to-date functionality with the best cleaning abilities, and most require chemical sanitization (to get you locked into that chemical contract). So, you may be paying more for sub-par quality. Equipment pro and CGA rep Tyler Scott states, “Chemical companies don’t care about the machines, they want the commission and the markup on chemicals because that’s how they get paid.”

“It’s like buying a Cadillac verses a Yugo; You’ve got all the features and benefits with a Cadillac, but the Yugo gets you up and down the street,” he adds.

The ultimate bang for your buck

The Champion dishwashing machine line includes high-efficiency undercounter dishwashers and door-type dishwashers. Their undercounters offer steam-free drying and a cold-water feed (great for bars), and their door-type, DH6000 series dishwashers meet water use restrictions for states that require them, and use ventless heat recovery, which eliminates all the steam and continuously prepares water for the next cycle. These also come equipped with a touchscreen interface that has pre-installed operations and cleaning manuals, as well as service diagnostics and a real-time temperature display.

Many of these dishwashers are eligible for Energy Star rebates because they are water efficient and can save 25% more water than standard models. Businesses can save about $200 per year and up to 52,000 gallons of water due to reduced water usage. These rebates are not applicable for leased equipment.

If you are considering a leasing option, the pros at ACityDiscount advise that you make sure you know what your leasing options are and talk to other restaurant owners to get a good idea of who are the most reputable companies.

The differences between leasing and owning a commercial dishwasher

Questions about commercial dishwashers? Call ACityDiscount’s sales team at 404-752-6715 or stop by our Norcross showroom at 6286 Dawson Blvd. NE in Norcross, GA 30093.

Learn more about selling us your equipment here.