When you hear the word “lease,” what comes to mind? A car lease, perhaps? Or maybe an apartment lease? Or if you’re in Florida, maybe you think of a boat (or yacht) lease? For many consumer goods, leasing would seem to be a viable, desirable option. You get exactly what you want, often at a more affordable price. With car leases, for example, luxury cars are more affordable to more consumers (who hopefully aren’t spending beyond their means).
If you hadn’t known, leases are for copiers too. That’s right: the convenience and flexibility of leasing now benefit your office equipment too. You can get a new copier every, say, three to five years at the end of a lease, giving you the latest, greatest document-solutions technology pretty much every time the technology comes out.
Before I dive too deeply into all the benefits of copier leases, let’s start at square one.
Why lease a copier rather than buy one?
Leasing has numerous advantages. Namely:
- New technology
Leasing allows organizations to periodically upgrade to the latest technology; some organizations don’t even wait until the end of the lease to upgrade. For this reason and others, only about 60 to 70 percent of leases go to the end of the term, according to an estimate from Evan Boddicker, sales support specialist at the GreatAmerica Financial Services leasing company.
When you buy a copier, on the other hand, you want to use it for as long as possible to get the most bang for your buck, to the point at which it becomes outdated or irreparable. If you try to replace the equipment you bought whenever new equipment comes out, you’re not going to get much use out of your purchased equipment.
Just like when leasing a car, when leasing a copier, your organization doesn’t have to pay the more expensive price of owning a copier. Initially, at least, leasing a copier is cheaper than buying one.
- Most copiers are paired with a service agreement
Just like apartment landlords and apartment complexes provide maintenance for the housing that tenants lease, so, too, do managed print services companies provide maintenance for the equipment that they include with a lease agreement. Note that with a copier (or house) you own, maintenance service is far from guaranteed.
Why buy a copier rather than lease one?
All that being said, leasing may not actually be the right choice for your organization at the moment.
If for some reason your organization has to break the lease, could it afford to do so? Moreover, organizations with low volumes of printing – more specifically, fewer than 700 prints, copies or scans a month – don’t normally need to lease the larger equipment (designed for high volumes of printing) that is typically leased. Low-volume organizations could be better off with a small, desktop (laserjet) all-in-one multi-function copier.
Your organization might also consider buying a used copier, which – when bought from a certified dealer – can have a warranty. For the most reliable support, make sure to work with an authorized dealer or direct manufacturer’s branch.
What kinds of leases are there?
There are two main kinds of leases:
- A fair market value lease
With a fair market value lease, you make monthly payments on the equipment. You (the lessee) can buy it at the end of the lease for the residual value determined by equipment condition, market demand and other factors. This lease is advantageous to organizations seeking to periodically lease newer, up-to-date devices.
- A capital lease
A capital lease is like a loan agreement in which your organization initially owns the equipment while the leasing company retains a security interest throughout the agreement. A capital lease normally has a higher monthly payment than a fair market value lease. At the end of the lease, your organization gets rights on the equipment for $1.
Common leasing issues
The following are some common points of focus for organizations about to sign their next copier lease:
- Insurance policy
Some organizations already have their own insurance covering their leased equipment. Such organizations, said Boddicker, should “send us a copy of their insurance certificate so that we can remove them from our policy.”
“There’s a line in our leases that says that you owe us for any taxes that we are charged for the equipment,” Boddicker said, such as a property tax. “We get charged [for a property tax] and then send it back as a charge to the customer to have repaid to us…on an annual basis.”
- Origination fees
Don’t be surprised by an origination fee, which – according to Lexico’s Dictionary & Thesaurus – is “a fee charged by a lender on entering into a loan agreement to cover the cost of processing the loan.” The fee is normally around $100.
- End-of-term section
Boddicker said that the end-of-term section of an agreement states that customers must send the leasing company a letter of their intention as early as 90 days and no later than 30 days before the end of the lease agreement. A letter of intention says whether the customer plans to return the equipment, purchase it or take another course of action.
Do your due diligence
In general, organizations should read and understand all of the terms and conditions of a lease before signing it, said Breanna Walczyk, sales and operations support specialist at GreatAmerica.
“I think the big thing is just for the customer to have the conversation with the [sales] rep[resentative] who’s selling them the equipment,” she said. “Just talking through the lease, making sure both parties are under the same understanding of the terms and everything just so that there are fewer questions that come up after the fact. [It’s also important to] just mak[e] sure you’re on the same page with the company that you’re buying or leasing the copier from.”
There you have it
A copier lease isn’t so hard to understand, is it? Your organization is now well-equipped to make all the right decisions on its next copier lease. Click here to see what ClearView provides with a copier lease.