Big Blue Kills the ‘It Pays to Lease’ Deal
August 14, 2006 Timothy Prickett Morgan
IBM usually has at least one special leasing deal for its various server lines on the books at any given time. But last week, the company killed off a deal called “It Pays To Lease,” which was last tweaked back on April 26. So if you were hoping to get a new System i5 under the leasing term of this deal, snoozing results in losing. As far as I know, the “Get More, Pay Less” financing deal is still in effect.
Under the It Pays To Lease deal that was just withdrawn, the latest iteration of which dates from March 2005 with subsequent modifications for changes to the IBM product line, if customers signed a fair market value lease on equipment with a value of at least $1,000 for a lease term of 24 to 36 months, then they could get a rebate of 5 percent of the value of the equipment under finance. On a box like a System i5, this is not a small amount of money. This deal could be combined with other financing deals, such as the then-current Low Rate Financing deal or the Get More, Pay Less deal that is still in effect. The lease rebate deal could be applied to new acquisitions or upgrades to existing System i5/iSeries, System p5/pSeries, and System x/xSeries servers as well as to printers, storage, and point of sale products. Last week, IBM said that the lease rebate deal is withdrawn effective immediately, and only contracts written with payment commencement dates before September 1, 2006, would be honored.
IBM’s Global Financing unit is still offering the Get More, Pay Less deal, which is offering 2.99 percent financing to customers with Best Plus credit ratings; that rate rises to 3.49 percent in the fourth quarter. This financing deal can be used on new or existing equipment, and you have extend an existing lease by 36 months; all leases have to have a $1 end-of-lease purchase option. To get the third quarter interest rate, you have to accept delivery of the new machine or parts by September 30; the deal expires on December 31. You have to convert older iSeries 8XX machines to new i5 boxes to take part in the deal.