Racing Arcade Machines: Leasing or Buying? A Comprehensive Decision-Making Guide

Racing machines are highly interactive and attractive devices that can quickly generate revenue if placed in the right location. Before deciding whether to lease or buy, you must clearly understand the financial aspects, intended use, risks, operational capabilities, and after-sales service. Below, we’ve laid out the decision-making logic, calculation methods, and practical suggestions step-by-step using tables and formulas.

I. Decision Overview (See Conclusions First)

Short-term/Temporary Activities → Leasing Preferred (Low Cost, Zero Maintenance, Flexible)
Piloting New Venues/Validating Business Models → Leasing Preferred (Reduces Risk)
Long-term Fixed Venues with Stable Customer Traffic → Purchase Preferred (Lower Long-term Costs, Maximizes Revenue)
Home/Private Use → Direct Purchase (Leasing is More Expensive Long-Term)

However, don’t just look at “short-term/long-term,” also consider capital availability, operational capabilities, after-sales support, and the feasibility of importing/local sourcing.

2. Calculating Return on Investment (ROI) – Formula and Example

Basic ROI Formula (for purchase decisions)
Monthly Net Income = Monthly Gross Income – Monthly Costs (including maintenance/site fees/electricity, etc.)
Payback Period = Total Machine Cost ÷ Monthly Net Income
ROI (Monthly) = Monthly Net Income ÷ Total Machine Cost × 100%

Example: Assuming a racing car machine:
Purchase Price: $5000 (including door-to-door delivery)
Average Daily Gross Income: $60 (conservative estimate) → Monthly (30 days) Gross Income = $1800
Monthly Costs: Site share 30% ($540) + Electricity and cleaning/maintenance $50 = $590
Monthly Net Income = $1800 – $590 = $1210
Payback Period = $5000 ÷ $1210 ≈ 4.13 months → Approximately 4 months to break even
ROI (Monthly) ≈ $1210 ÷ 5000 × 100% = 24.2% (monthly)
Comparison with Leasing (same scenario)
Rental Fee: $40 per day → Monthly (30 days) Rent = $1,200
Lessor is responsible for maintenance and transportation (depending on the contract)
Monthly Net Income (Leasing) = $1,800 – $540 (Site Share) – $1,200 (Rent) – $50 (Electricity) = $10

→ Almost no profit (only suitable for testing or short-term activities)

Example Conclusion: If the data in the table above holds true, purchasing is more cost-effective; however, if the average daily income is lower (e.g., $20/day), the payback period will be longer, and leasing may be more secure.

3. Usage Classification and Corresponding Decisions (More Detailed)

1. Public Space / Commercial Operation (Shopping Mall, Arcade, Entertainment Center)
Priority: Purchase (Strong Long-Term Profitability)
If it is a new store or new location: first lease for 1–3 months for trial operation to verify foot traffic and payment rate, and then decide to purchase.

2. Events, Exhibitions, Company Team Building, Weddings
Preferred: Rental (short-term needs, purchasing is not cost-effective)
Note: Confirm transportation, installation/disassembly, deposit, and liability for accidental damage with the rental company.

3. Club/Themed Room Rental (e.g., private rooms, e-sports arenas)
If you already have a stable customer base and plan to rent long-term → Purchase
If you frequently need to change equipment for events or have a limited budget → Leasing or rent-to-own (some leasing companies support rent-to-own)

4. Home/Private Collection
Purchase (Leasing is costly in the long term, and purchasing allows for better customization and maintenance)

4. Machine Source Comparison: Local Procurement vs. Procurement from Chinese Sources (Detailed Comparison)

Practical advice: If you have import experience or a reliable logistics/customs clearance agent, consider direct sourcing from Chinese factories (significant cost advantages).

Before purchasing, be sure to confirm: whether DDP (Door-to-Door Delivery, including tax) is supported, whether warranty terms are provided (duration, on-site or remote), whether replacement parts are available, minimum order quantity, and delivery time.

5. Comprehensive Overview of the Advantages and Disadvantages of Leasing vs. Purchasing (For Negotiation and Internal Decision-Making)

Leasing – Advantages: Low initial cost, less cash pressure; supplier covers maintenance and transportation (clear contract);
flexibility: different models can be used for market testing; suitable for event and short-term market activities.

Leasing – Disadvantages: High long-term costs; limitations on customization and branding; limited inventory (may not be able to rent desired models during peak seasons); risks of deposits and additional fees.

Purchase – Advantages: Lowest long-term cost (no monthly rent); complete control, supports customization and brand display; higher profit ceiling (all income belongs to you); can be used as collateral or included in the balance sheet.

Purchase – Disadvantages: High initial capital requirements; responsibility for maintenance and replacement parts lies with you (or your local service provider); most imported purchases involve customs clearance and logistics risks.

6. Operation Checklist: Essential Items Before Purchase/Rental

Pre-Purchase Checklist (Concise Checklist)
Machine Demo (Offline Experience)
Quotation: Price including tax, shipping (FOB/CIF/DDP)
Warranty Terms (Warranty Period, Coverage, On-site/Remote Service)
Spare Parts Supply Cycle and Price
Local Repair Center or Technical Support Resources Available
Payment Terms, Sample Inspection Terms, Return Terms
Voltage/Plug Modification Required, Compliance with Local Regulations

Pre-Rental Checklist (Offline Experience)
What’s Included in the Rental Fee (Shipping, Installation, Dismantling, Repair)
Deposit and Damage Compensation Terms
Rental Period, Overdue Fees, Early Return Policy
Replacement Mechanism (How to Replace a Machine in Case of Failure)
Insurance and Liability Attribution
Does the Company Provide On-site Technical Personnel or Training on Operating Instructions?

7. Negotiation Key Points (Strategies for Negotiating with Suppliers/Leasing Companies)

Prioritize securing DDP (Delivered Duty Paid) or customs clearance included (to avoid substantial hidden costs later).
Strive for a trial rental/trial period (request a 3-7 day trial period when renting).
Strive for a longer warranty period or paid extended warranty (when purchasing).
Negotiate spare parts packages or first-year spare parts discounts.
Specify the replacement time SLA (24-48 hours for replacement in case of failure) in the rental contract.
Strive for training, installation, and maintenance courses when purchasing (especially important).

8. Key Operational and Maintenance KPIs

Average daily coin insertion/payment counts (or average daily revenue)
Average revenue per game (average revenue per game)
Usage frequency (peak/off-peak distribution)
Failure rate (number of failures per month)
Mean Time To Repair (MTTR)
Revenue sharing ratio and net profit margin
Tracking these KPIs can quickly determine whether the machine is worth purchasing or continuing to operate.

9. Risks and Pitfalls

Hidden Costs: Import taxes, agency fees, local transportation, installation, certificates of conformity, socket modifications, etc.
Renting Second-hand or Refurbished Products: A less-than-new appearance can negatively impact customer experience and payment rates.
Contract Terms: Pay attention to clauses regarding “force majeure,” “compensation for periods of unavailability,” and “damage assessment standards.”
Electricity and Safety Compliance: Some countries or shopping malls have strict requirements for electrical safety and certification.
Seasonal Fluctuations: Revenue is high during shopping seasons/holidays and low during off-seasons; be prepared for cash flow fluctuations.

10. Decision-Making Flowchart

Clarify Purpose (Activity/Business/Residential)
Estimate Average Daily Income → Calculate Monthly Net Income
Calculate Payback Period & Compare Rental Costs (Same Term)
If Payback Period ≤ 6 Months and Repair Capability Available → Prefer Purchase
If Uncertain/Long Payback Period or Insufficient Budget → Prefer Pilot Rental
If International Procurement → Assess DDP Feasibility & After-Sales Solution
Finally Sign Contract, Clarifying SLA, Warranty, Replacement Terms, and Accidental Injury Coverage

11. Frequently Asked Questions (FAQ)

Q1: What if the machine breaks down after purchase?
A: First confirm the warranty coverage, whether it includes on-site service or only remote support; establish contact with local repair shops or sign a third-party maintenance contract.

Q2: Are there flexible rental options with low deposits or daily payments?
A: Yes, especially for activity rentals. Many suppliers support daily or weekly billing and offer insurance and deposit alternatives.

Q3: How to quickly obtain imported machines locally?
A: Prioritize suppliers that support DDP (Delivered Duty Paid) or find a reliable freight forwarder and customs broker; also, pay attention to local certifications and voltage differences.

12. Conclusion and Recommendations (Action Items)

Step 1: Create a simple Excel spreadsheet, listing “Total Purchase Cost / Estimated Daily Revenue / Site Revenue Sharing / Rental Options,” and calculate the payback period.
Step 2: If you are unsure whether a location will be viable, rent for 1-3 months for testing before deciding to purchase.
Step 3: Before purchasing, be sure to test the equipment offline and confirm warranty and spare parts availability.

13: About Us

We (Full of Fun) are a professional manufacturer of arcade game machines, racing machines, basketball machines, claw machines, and other entertainment equipment. We support OEM/ODM and brand customization, and provide global customers with:

Multiple models of racing machines (single/double/multiplayer versions)
Factory direct shipping, DDP delivery to door including tax
1-year warranty + lifetime technical support
Stable spare parts supply
Provides testing videos, packaging videos, and factory inspection videos
Multilingual pre-sales/after-sales service
Adaptable to various voltage and certification requirements