Has anyone ever "leased" or "rented" an engine rather than buy?

Decent idea... but probably a bad idea in practice.

It's an interesting concept for sure, but without knowing your full set of circumstances, I would agree it's not a good idea. 

1) What gaurentee do you have you will get your locomotive back? They could just skip town with it - we do have scoundrels in this hobby. I have never leased an automobile though I am sure many folks here have - a dealership I imagine would have many means of gaurenting their car is returned or insured etc. I don't think a small time hobby shop could afford to send repo men after a locomotive. 

2) what if they damage it? If they can't afford the locomotive in the first place, they probably can't afford to repair it

3)  If they can't afford to buy it, I don't think they can afford to lease it either. Case in point - a VL Hudson can be bought for around $1000 street price (i'm just shooting from the hip here on that price for the sake of example).  At $100/month after 10 months the leaser could afford to outright buy a model. Well using your example price of $50/month why not just save a little more and buy it? 

Not trying to shoot down your idea  Mike, just pointing out the pitfalls from my perspective. Again, it's an interesting thought and one I would enjoy seeing discussed here. 

When it dies, is it your problem, or do you blame it on the use and try to get the renter to fix it?  How much use would be OK?  How do you know the renter is using it properly(curves, over-voltage, etc)?

I agree with Chris, lots of opportunities for bad things to happen, with limited upside.

Let us know how it goes if you do it though.

-Dave

I have done that with a member of my kids club giving him one of my Locos for a couple months. I have had to take it back because he was being a pain the rear.

I also had to take of the costs for the loco

Sorry it's not even a good idea. Wait till the first guy you rent them to decides to never return your $2,000 engine or he moves to never be seen again. 

If you need money that bad it would be better to sell them. 

Another question, why are they sitting in a closet never to be seen or run? 

I have heard bad ideas before but this one is near the top.

good luck,

Dave

Then there is the matter of residual value as well as "excess mileage". The engines will depreciate in value with use; are you limiting the number of scale miles the lessee can run per month? Charging $.50 per mile in excess of lease terms?

Your $1,000 engine could be worth $250.00, $150 or less  in a minute if the wrong lessee gets his hands on it. What if someone cannibalizes your engine for parts and replaces with fried boards and claims he received it that way?

Too many risks and too few benefits IMO. 

In leasing cars, the lessor is stuckee for maintenance, and that potential is built into the cost. What that sounds like is:....GRIEF!  (if you like owning them, you like owning them in good condition)

I love the concept, but as delicate and troublesome as the exotic newer engines are, I think this is a mine field for both sides.  If someone rents it and it breaks through no fault of his; who pays for the repair? Do you prorate his rent time and give a refund?  If he does damage it, did you get a large enough deposit to cover the repair?  What about cosmetic damage which is a subjective evaluation?  Or hidden damage that you didn't see or evaluate completely upon return?  Or hidden damage that he didn't see or test for before the rental.

I would definitely put a LoJack in it if I could.

The rental concept is very feasible today because our society no longer saves up and buys things.  It's the instant gratification, gotta have it now mentality which plays well for marketing people.  I was taught that basically you should only buy two material items on a loan: a car and a house.

I think I'd look at this from the lessee's perspective.  Personally I would be uncomfortable running a locomotive of that value I don't own if was from someone's private collection.  Funny thing is that I run club locomotives all the time without that feeling.  However, there is the expectation is that they will be run, decently taken care of and our dues cover the cost of repairs and maintenance.  I guess that sounds inconsistent, but I think the main difference is that I know my fellow club members and we share values and a level of confidence in each other.

If you were to consider putting your locomotives in a "lease fleet" like real locomotives, there could be some positives too.  I would recommend reviewing some contracts that are no doubt available on line for what is involved in leasing a real locomotive.  Who knows?  Alternatively you could lease to those people you come to know and trust - say a vetting process for potential lessees. 

I must say, good idea or bad, it is certainly an original idea and I have to applaud you for that.

We all have too many locomotives that sit in the closet.  Some people are just afraid to ... oh never mind on that joke .... it's a family forum.

In the broadcast industry there are folks and studios who rent out high end microphones and audio equipment, so i don't see why this doesn't have potential to be somewhat similar. 

Lol! Lojack... Yeah... Right! Wait til the cop tells you your loco is such a small value we will only investigate if we happen to get a signal in the area. Oherwise, you are S.O.L. 

I believe the practice was tried by the Train Station in Mountain Lakes, NJ at the end of the last century. I'm  not sure if they still have that service.

Social Security #, place of employment or other proof of income, permanent home address only if you have been there for 10 years or more, three references and their permanent addresses and phone numbers, and some type of letter describing why you want to "rent" my units and why I should let you. Oh and don't forget, some type of deposit that you will get back if the unit is in the same working condition it was when you received it considering normal wear. If not, that will be a portion for my next engine purchase.

Nice doing business with you!

If the leasee can afford the security deposit and first two months up front, they are close to the purchase price. Only you can decide if any positive cash flow is worth the risk, time and effort. 

John in Lansing, ILL

I could just not do it. I am very careful with my engines, and know of any and every mark on them. I would rather take them out of the box and put in a display case to admire. I would never lease them out.

Joe Gozzo

I would not do that one.  

It could work:

1)  You retain credit card and address info on renter.   The can't skip town or steal the loco easily.  Sure someone could do it, but would they think model trains is a lucrative theft opportunity - not likely.   Where would you "fence" a hot loco? - say buddy, you wanna but a used VL BigBoy?

2)  You take out insurance on the locos, built into the rental price, so that if something bad happens, you are covered.   Now finding an insurance agent willing to take on this small project - I have no idea.

3)  First time renter security deposit, refundable.

I would definitely be interested in renting - I don't have any vision line locos, don't plan on any purchases, but a couple months rent would really be a fun thing for me.   I can set up an O72 loop of Fastrack and run a magnificent loco.

Now for the hard part:  Which loco would I rent first?  Big Boy?  A 4-8-4?  Is there a vision line Challenger?   Something fun to think about!

-Ken

Sell them. You would be setting your self up for headaches doing otherwise. 

I don't see too many takers. As others have pointed out between the security fee and monthly rental fees a customer could be onthere way to buying one.

It would take 2 or more years to recoup your money, unless you resell them after a year abd you may break even or lose money. As Chris stated avoid the heafache and just sell them.

Why would you want to rent them..I guess you have never been a landlord,

Don't do it

I know people that have side businesses that only break even. However the tax write offs make it worthwhile. Maybe you could write off train purchases and depreciation. LOL  We all know how fast these "investments" depreciate.   

ChiTown Steve posted:

I know people that have side businesses that only break even. However the tax write offs make it worthwhile. Maybe you could write off train purchases and depreciation. LOL  We all know how fast these "investments" depreciate.   

You'll never convince me that anybody ever made a dime from a business that breaks even.  They are probably including depreciation in the equation.  Replacement cost would take a chunk back.

If they are using the losses on one business to offset set gains on another that is a different story.

By definition, breaking even is just that.

Real estate is a whole different ballgame.  There you can have assets that appear to depreciate while actually appreciating. 

Every piece of equipment I have ever rented was so beat up that I was never able to complete the job with it. I usually have to run out and purchase one like it.

So my vote is no... bad idea.

"Funny" topic in the sense this is exactly the view I take when I sell an engine.  Prior to going "all in" on scale I owned several Railking Imperial engines, all of which I purchased brand new.  A few years later I sold them all in separate sales, all within $150 of what I paid for them brand new.   My feeling after the sales was very positive as I had spent on average $80-$100 per year to "rent" the engines.

-Greg

Perhaps it's not something the hobbyist/collector is capable of, but if Lionel offered the new brass hybrid engine for "lease" or even a 12-24 month payment plan, I would have gotten one. Didn't feel like dishing out $1200 upfront at the time....something to consider as it seems collectors are more frugal with their purchases these days 

It seems like there is a lot of knee jerk reaction here.  If one can lease an automobile that has a tremendous value ... $20k to $100k and beyond, why couldn't a $1-2k toy train be leased?  They already do it with jewelry.

The lessor would be obligated to do their due diligence on the lessee, something like a credit check and such.  

I would think there would also be an element of insurance needed.

The whole opportunity revolves around scale.  It might not work for someone with 5-10 engines to let out, but if several were pooled together, there should be a positive business case.  It's possible, but it will take a lot of upfront work to make sure the business model is sound.

In this whole thread not one person has stated what a total idiotic idea this is. This is such a bad idea I don't even loan my trains out to my relatives or best freinds. 

But to each his own

david1 posted:

In this whole thread not one person has stated what a total idiotic idea this is. This is such a bad idea I don't even loan my trains out to my relatives or best freinds. 

But to each his own

David1 -

Just because YOU don't agree with an idea that does not make it idiotic.  

BTW, I would not loan my trains to your best "freinds" either.  

David1 - YOU don't have to be the one to rent it out, but surely if Lionel's next 2017 vision line steam engine was available for $50-$75 a month, no money down, and you were allowed X amount of scale miles, it would be tempting?? As opposed to paying $2000-2500 up front? 

There is no model locomotive that I would want THAT badly enough to rent or lease it.

Rusty

david1 posted:

In this whole thread not one person has stated what a total idiotic idea this is.

Maybe because in certain limited situations it might not be such an "idiotic" idea. 

Would you be open-minded enough to consider one man's (shop's) experience?

Consider...

I am personally aware that years ago there was one store (LHS-now gone forever) that did indeed rent an engine.  Granted it was of Large Scale (G), but rentable, nonetheless.

LGB made/makes a dandy MOW Track Cleaning Loco, item #21670.  It has two motors...one to propel the loco along, another to drive track-cleaning wheels on the front end.  It cleans/brightens tarnished brass track quickly, efficiently, and surely beats the knee-pads and elbow grease technique for most outdoor layouts in that scale.  And, if you haven't experienced keeping track-powered trains running well with brass track, you don't know how important this MOW effort can be to the enjoyment of the hobby!

Anyhow, this store owner recognized that as valued as this loco was to his large scale customers, few could afford to own this expensive loco for it's periodic and seasonal use.  So he decided to have his store make one available for rental.  And it was, indeed, a very popular service for the select group of customers!

Now, he was savvy enough to not let the engine out the door without some assurances of its return.  Most importantly was an adequate financial (cash) deposit....not insignificant to its several hundred dollar price tag.  His rental was an hourly rate, since most of his customers lived within easy driving distance of the store and a couple trips of the loco around most layouts would do the trick. 

So, as far I as know (I was mostly into HO at the time.) it was fairly well-received as a store service...When I learned how costly that engine was/is, it's little wonder why!!  Of course, battery power is the rising star today of large scale....which obviates concerns for track conductivity...and this MOW loco is perhaps not valued as much for its track cleaning function.  So, were the LHS yet in operation, perhaps the rental opportunity would be of less interest than providing strong battery and R/C support to the same group of customers.

But, I will certainly agree that, Vision Line, Premier, 3rd Rail, etc. locomotives????....Just to put them 'to use'??.....Even with a $$$$$$$$$$$$ depost?......Not my idea of good business venture!

And, yet, someone tried this "idiotic" idea...

FWIW, always.

KD

I would be on the side arguing it likely would only come to grief. We aren't talking an auto dealership here leasing mass market cars, where the person getting the lease has to pass a credit check, where they are responsible for any damage to the car, and so forth, the dealer and the finance arm backing it have to do work.....and if the person skips or otherwise damages the car, leaves town, they have resources to be able to track them down, file criminal charges, put a lien on accounts, etc.  The reason car leasing works is it is lucrative enough and expensive enough a product that the cost of doing business is worth it. And add into that how fragile these engines are, you likely would routinely get an engine back that was damaged in some ways, whether parts broken off, scratches, etc, not to mention the possibility of it literally dropping dead or burning out, and who would pay for that?  Would someone be willing to lease an engine at X dollars a month and put down a security deposit that actually meant something (put it this way, even 100 bucks given how expensive these are to repair, would likely not cover much), yet to a lessee, would they be willing to tie up 100 bucks in a security deposit like that? 

Leasing an engine you own would be more akin to trying to lease a 2000 dollar junker car, in the sense that the cost of doing business would be a significant percentage of whatever money you could bring in. Given how small a market is, also, how many people would want to rent something like a vision line engine, if they did it only for a month or two, what would be the point? If longer term, like a year, the cost of renting it would likely come close to a price they could buy one on the used market. 

I don't think this was an idiotic idea, I think it was a pretty interesting idea to solve a problem (ie engines not being used that maybe someone else could use), I just think the cost of doing this, even if you are doing it just for fun, in terms of both money and the time spent administering it, would likely make the fun disappear quickly.....and I doubt it could be financially break even, let alone make money (especially if the idea is to convince someone that buying these engines is an investment that can return (monetary) value *lol*). 

A fun conversation but comparing this train rental concept to car rental/car leasing is definitely apples and camels.  The commodity value and market demand for the rental use of a car or vehicle far exceeds toy train rental.  The costs and overhead that are easily amortized in a car rental business would swamp a toy train business model. 

And would the renter have a preference for a certain road name on the engine or are they just wanting to see any road name SD96 VL engine run on their layout.

I think the next big thing is being able to download and playback the virtual reality experience of owning/running these expensive engines (just the good part, not when it breaks down/won't communicate/runs reverse only/etc). 

Netflix is probably already working on that concept.

I have rented engines and rolling stock.  Well, at least I have a sense of doing so.  If I buy something at an auction site, and, for whatever reason, wish to sell it later I consider it a rental.

I might make money or break  even.  In that case it could be thought of an "investment" (only as an afterthought).

If I lose money I'll just consider the difference as the rental fee for the item.

Alan

If you want the thrill of running these prized pieces then join a modular club who has a member that buys and brings many latest and greatest locomotives and enjoys sitting and chatting while others run his locomotives like I did.

You rent something for utilitarian reasons. You rent a U-Haul to move. You rent a car at the airport as ground transportation for a trip. You rent a tiller to prep a garden. Why buy something you're only going to need for a very short term?

You lease something as a longer term rental with more complex conditions and obligations, but the purpose is still primarily utilitarian. You lease an apartment to have somewhere to live. You lease a car for daily transportation. Now you can even lease a smartphone to access your data plan. In all cases, it provides advantages over buying, but again for something you need.

I don't buy toy trains as a utilitarian product. The thrill isn't in running something I don't own. It is in running my trains.

Now I suppose there is someone out there who might want to rent a train for a public train show (utilitarian) or lease a train for a long-term display like a museum (also utilitarian). That's your market. A remarkably limited market.

Don't overthink this one. You are not on to some money-making scheme.

I don't think it's a very realistic or practical idea and doubt it would turn out well. However the timeline is littered with wealthy people who pursued ideas and businesses others said much the same about.

And many more ideas that people dismissed that turned into absolute disasters.

One of the items overlooked is the availability of parts. Many of these high end locos have very limited parts supply if there are parts at all ( depending on the importer/ Mfg.) So what does the lessor do of a cosmetic part is severely damaged- esp after 3 years out?