What is the method of obtaining equipment or vehicles while paying for rental over a fixed period called?

The method of obtaining equipment or vehicles while paying for rental over a fixed period is known as leasing. Leasing allows businesses to use assets without the significant upfront cost associated with purchasing them outright. Instead of purchasing the equipment or vehicles, the business enters into a contract with the leasing company to use the assets for a specified duration, making regular rental payments during that time.

This arrangement can be financially beneficial because it helps to conserve capital, maintain cash flow, and allows companies to upgrade to newer equipment more frequently. At the end of the lease term, businesses often have the option to purchase the asset at its residual value, renew the lease, or return the asset, providing flexibility based on the business's needs and economic conditions.

In contrast, purchasing would involve a one-time payment to acquire the asset completely, which might not be feasible or strategic for all businesses, especially startups or those with limited cash flow. Financing typically refers to obtaining funds to make large purchases, often leading to ownership, rather than simply paying to use an asset over time. Investing generally encompasses putting money into assets with the expectation of generating a return, which isn’t focused solely on the rental aspect.