No matter how big or small your practice is, acquiring an MRI machine is a serious investment. You have to not only find a machine that makes sense for your workflow but also decide whether buying or leasing is better. It’s a nuanced decision, and it depends on your specific needs, but there are pros and cons of buying and leasing to consider before moving forward.
What an MRI Machine Actually Costs
With an MRI machine, the sticker price is just the entry point. That said, it’s still an important factor, especially if you’re considering a premium 3T machine over a standard 1.5T model. In addition, wide-bore models command higher prices because of the added complexity in the hardware.
To fully calculate the actual cost of an MRI machine, you have to think about operational costs over the lifespan of the equipment. Installation, maintenance, insurance, and software updates all add up, and if you’re not prepared for all of those costs, you can find yourself in an unpleasant situation.
Tax Implications of Leasing vs. Buying
Tax is one of the most important factors to take into account when thinking about the real cost of an MRI machine.
When you buy an MRI machine, the IRS allows you to recover the cost through depreciation, or deducting the price against your income over time. If your practice earns enough income, you might be able to write off the entire purchase within the first year. (The equipment must be installed and in use by the end of the year for this to work.)
When you lease, the tax treatment depends on the type of lease. With a true operating lease, you do not own the machine, so there is no depreciation. You simply deduct your monthly lease payments as regular business expenses. These deductions are smaller in any given year than a big first-year write-off, but they are spread evenly across the term and are not subject to the strict net income caps required for massive upfront depreciation deductions.
Capital Budgeting, Resale Value, and Your Balance Sheet
You also need to consider how an MRI purchase or lease will affect your practice’s finances over the long term. This is where capital budgeting comes in. Capital budgeting is simply how you plan for and justify a large investment, and it involves thinking about financial impact and eventual possibilities like reselling.
When you buy, your MRI machine becomes an owned asset that shows up on your practice’s balance sheet. Because you own the machine, you have the potential to resell it down the road, and thus your purchase has a real resale value that counts toward the true cost of ownership. If you resell, you effectively recover a portion of your investment.
When you lease, you do not take permanent ownership of the equipment, and your investment has no resale value. The trade-off is that you preserve your cash and borrowing capacity, lock in predictable monthly costs, and keep the freedom to upgrade or switch machines at any point. You don’t have to sell the machine or absorb the MRI equipment cost.
Which Option Is Right for Your Practice?
Ultimately, deciding whether leasing or buying is better for you comes down to deciding whether your practice can actually leverage a big deduction.
If you’re profitable enough that a large write-off could meaningfully reduce your tax bill, then buying might be the better path, especially if you plan to keep the machine for the long term.
On the other hand, if your profits are smaller and you don’t have as much tax to offset, then the tax differences between the two are effectively negligible. In this case, the decision would rely on non-tax factors, which is why smaller practices often choose to lease.
Because the right answer depends on your practice’s profitability, entity type, and state, treat this as a starting point and consult your tax advisor before making a decision.
Talk Through Your MRI Acquisition Options
Investing in an MRI machine is a serious decision. At Imperial Imaging Technology, we help you select the best model for your practice and equip you to make the decision of whether buying or leasing is right for you. If you’re in the market for an MRI machine, contact us to see what we can do for you.