So, imagine that your organization has been working with a copier dealer on a copier lease. You’ve agreed on all aspects of the lease except lease length. You’re going back and forth with decision-makers at your organization about the ideal length of the lease. 36 months? 60 months? How many months should the lease be? You’ve consulted the Internet and asked other organizations with copier leases, but still haven’t found clear answers about which lease length is best for your unique organization. Where do you turn?
Let the good folks here at ClearView Business Solutions help your organization quickly and easily decide on the right copier lease length for your organization’s needs. We’re a document-based technology solutions company based in Tampa, Florida. Our highly knowledgeable team of managed print services experts boasts a wealth of knowledge in document workflow, printing efficiency and document storage, retrieval and security.
With this article, we will discuss the benefits and drawbacks of 36- and 60-month copier leases. Our goal is to help you understand the differences and move forward with a lease that is best for your organization.
What are the benefits of a 36-month copier lease?
Because 36-month copier leases are shorter than their 60-month counterparts, they give customers the flexibility to replace their copier guaranteed at the 36-month mark or earlier. That’s good, since an organization’s copier’s anticipated monthly print volume could necessitate it being replaced in less than 36 months. Also, a shorter lease length gives organizations more flexibility to quickly replace their machines (if desired) if manufacturers’ model families are updated every two to three years.
The 36-month lease can coincide with the duration of other organizational needs, including other leases. Organizational needs include supply chains, printing volumes and other aspects of a business plan that tend to be refreshed around the 36-month mark. A lease can also fit within an organization’s by-laws, which can limit the length of a lease term. Manufacturers and dealers like a 36-month lease too, as they often incentivize such a lease term.
Finally, for better or for worse, a 36-month lease may simply be what your organization’s always done.
What are the benefits of a 60-month copier lease?
Length isn’t the only difference between 36-month and 60-month copier leases. A 60-month lease is more than one-and-a-half times the length of a 36-month lease. It also provides a low monthly payment option.
Generally speaking, a 60-month lease is beneficial to organizations seeking a low monthly payment. Compared to shorter lease terms or buying cash, low monthly payments save organizations money that they can then use for other purposes.
Moreover, by their very length, 60-month leases work well for organizations planning on staying with the same vendor or solution. Although 60 months are rather long, organizations with a 60-month lease normally don’t intend to buy the hardware, unless they’ve chosen a 60-month capital lease (also known as a $1-out lease, described here).
Sometimes organizations go with a 60-month lease because they weren’t aware of or offered any other term. If current payment terms and rates are competitive, with stellar service and a good fit in equipment, a longer-length agreement can be a benefit.
What are all of the downsides of a 36-month copier lease?
For all the flexibility and ease of upgrades that a 36-month copier lease provides, it still has its downsides. They are:
A 36-month lease has a higher monthly payment than a 60-month lease. If your organization wants to change vendors or equipment early, then it could be more expensive to satisfy the remainder of the lease agreement, depending on the length of the original term and the remaining term of the lease.
- Premature hardware replacement
At the end of some 36-month leases, organizations may be forced to replace or return the leased hardware, even when they do not wish to do so. Their hardware or solution could still be sufficient at the end of 36 months.
Whether you believe it or not, even 36-month leases can be inflexible in at least one way. If an organization wishes to keep its equipment after a 36-month lease, it may have to pay month-to-month at the end of the lease, at a higher 36-month term payment.
What are all of the downsides of a 60-month copier lease?
Surprise, surprise! A 60-month copier lease has downsides too. They are:
- Less flexibility
For organizations, a longer commitment to the leasing company can lead to a larger overall cost of the solution. For example, if service rates escalate, then service expenses can increase between the 36th and 60th months of the lease.
- Even more inflexibility
Say that new, disruptive technology comes out well before the end of an organization’s 60-month lease. If such an organization wants to change equipment, vendors and more before the end of its lease, it could be harder to do so than with a 36-month lease.
- Potentially more expensive
For organizations looking for a way out of their lease between the 36th and 60th months of the lease, they won’t be able to break it without paying for any obligations in the lease. That could end up being more expensive than simply staying in the lease until the end, depending on the length of the original term, and the remaining term in the lease.
- Less room for error
If an organization is stuck in a 60-month lease with the wrong solution, service or contract, then, well…you’d be stuck for a longer period of time.
Still unconvinced that 60-month leases are sometimes just a bit too long for organizations? Then note that in our experience, most organizations in a 60-month lease upgrade to new equipment between the 36th and 50th months of their lease.
What kind of organization is a 36-month lease best for?
As you can see, a 36-month lease isn’t for all kinds of organizations. It is, however, for organizations with higher print volumes, since their hardware will usually need to be replaced sooner than hardware that prints at lower volumes.
What kind of organization is a 60-month lease best for?
As previously mentioned, 60-month leases are best for organizations planning on staying with the same vendor or solution. They’re also good for organizations planning to buy the hardware at the end of a 60-month capital lease (also known as a $1-out lease). Finally, 60-month leases are good for companies needing to use more of their capital for operational expenses.
What are the most common lease lengths?
To give you an idea of the most common copier lease lengths, we did some research. Note that although 36 and 60 month copier leases are the most common, we have several lease length options. Check out the approximate percentage of a company’s copier leases based on length:
- 12 months = 0.47%
- 24 months = 0.71%
- 36 months = 0.24%
- 39 months = 5.69%
- 48 months = 0.95%
- 60 months = 2.13%
- 63 months = 88.15%
As you can see, a lease length of 63 months is by far the most popular lease length for this company’s customers. The second-most common lease length is 39 months, followed by the third-most common lease length of 60 months.
What copier lease length is right for you?
As you can see, both 36- and 60-month copier leases have their pros and cons. You should now have a better idea of which lease length is better for your organization. As you may have read elsewhere, length is just one of many factors to consider when choosing between copier leases. If your organization is any size from small to just a bit smaller than an enterprise-level organization, then it’s sure to benefit from one of our copier leases. Give ClearView Business Solutions a call at (844) 282-2737.