In addition to the PC clones they assemble and sell, mail-order houses have come up with yet another offering with someone else's look and feel: long-term leasing. Once the purview of specialty finance firms, direct-seller leasing tends to be cheaper, since it's based on deep-discount retail. And it's usually less demanding: to be creditworthy, a company can have been in business for as little as six months. If the accounting is deftly handled (see FASB Statement Number 13, "Accounting for Leases," available from the IRS by calling 800-TAX-FORM), a lease can lower the cost of capital and enhance cash flow.

To determine the variables of basis prices and financing rates, Inc. recently cold-called a number of direct sellers that offer lease deals. Each of them was asked to quote on a system having an 80386/25 CPU, 64 kilobytes of cache memory, a 100-to 130-megabyte hard drive, 4 megabytes of RAM, two floppies, DOS, and super VGA with a .28-millimeter dot-pitch color monitor.

Inc. shopped for terms of a fair-market-value lease, which at its end provides for purchase of the leased product at 10% of the retail price. (A slightly more expensive leasing arrangement sells the product to you for a dollar but may not be tax-advantaged.) We specified a two-year period, a span that usually meets the criterion of being at least 75% of the economic life of the property.

Here are some offers, in order of total cost:

Quoted basis priceLease options Two-year fair-market-value lease Total to acquire Amortizd rate
Keydata International 800-486-4800$1,795. Comes with Windows, mouse1 to 4 years $90/month $2339.50 18.5%Zeos International

800-423-5891$2,195. Has only 32 kilobytes of caching; comes with Windows, 1-2-3, Ami Pro, mouse1 to 3 years $110/month $2,859.50 18.4%Swan Technologies

800-468-9044$2,395. Comes with Windows, Works, Quicken, mouse1 to 5 years $115/month $2,999.50 14%Ares Microdevelopment 800-322-3200$2,246. Comes with Windows, diagnostics, games, virus protection2 or 3 years $116.35/month $3,017 21.8%Northgate Computer Systems, 800-345-4633$2,399. Comes with Windows, mouse1 to 5 years $118.99/month $3,095.66 17.3%Dell Computer

800-545-9695$2,782. Lacks color card, color monitor (black-and-white supplied); DOS about $50 extra; comes with 230-megabyte hard disk1 to 3 years $143/month $3,710.20 19.2% -- Reported by Michael P. Cronin

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