The Challenges of Leasing a Printer

You’ll pay more in the long run. Ultimately, leasing is almost always more expensive than purchasing. For example, a $4,000 copier would typically cost a total of $5,040 if leased for three years at $140 per month, but only $4,000 (plus sales tax) if purchased outright.
You still have to keep paying even if you stop using the equipment. Depending on the copier lease terms, you may have to make payments for the entire lease period, even if you no longer need the equipment, which can happen if your business changes.

The Benefits of Buying a Printer

It’s so easy. Buying equipment is simple. You decide what you need, and then go buy it. However, when you lease equipment, you’ll have to complete paperwork and provide detailed, updated financial information to the leasing company. You may also have to share how and where the leased equipment will be used.Also, lease terms can be complicated to negotiate, and if you don’t negotiate properly, you could end up paying more than you should or receive unfavorable terms.
You call the shots regarding maintenance. Equipment leases often require you to maintain equipment according to the leasing company’s specifications, and that can get expensive. When you buy the equipment outright, you determine the maintenance schedule yourself.

The Challenges of Buying a Printer

The initial cost for needed equipment may be too much. Your business may have to tie up lines of credit or cough up a hefty sum to acquire the equipment it needs. Those lines of credit and funds could be used elsewhere for marketing, IT and software upgrades, advertising, or other functions that can help grow your business.
Eventually, you’re stuck with outdated equipment. As I mentioned earlier, copier technology becomes outdated over time. A growing small business may need to refresh its technology in some areas every 36 – 48 months. That means you’re eventually stuck with outdated equipment that you must donate, sell or recycle.

Ask Lots of Questions

Perhaps most importantly, you’re going to ask questions and get answers from your vendor and/or MPS. I have listed a few below to get you started:

Is there a buyout option in the lease? You may have a choice between a fair market value (FMV) option and a $1 buyout option. FMV means you can buy the equipment at the lease’s end for its fair market value, which could be hundreds of dollars.In contrast, a $1 buyout option means the equipment is yours for $1 when the lease expires. While that might sound like the best option, keep in mind that monthly payments on FMV leases are usually lower than $1 buyout leases. If you’re certain you’ll want to upgrade to new technology when your lease expires, go with the FMV option.
How long is the copier lease term? Usually, leases for computer equipment run 36, 48, or 60 months. The longer your lease, the lower your monthly payments. But you’re also likely to pay more over time with a longer lease.
Does the equipment have to be insured? Some leasing companies require you to insure the leased equipment. If you don’t, fees may be added to your monthly payment to cover insurance.
Can I add to the lease? Most leasing companies don’t mind if you add equipment to an existing lease. Your lease payment will be recalculated accordingly; lease terms usually don’t change.
Can I terminate the lease early? What if you no longer need the equipment you’re leasing or you want to upgrade to newer technology sooner than you expected? Find out in advance if you can pay off your lease early, and if there’s a prepayment penalty (and if so, how much?).

Ultimately, a few simple rules of thumb may help you decide to lease or buy. If your equipment requirements are relatively small and you have the money, or you can get a low-interest loan, then just buy your equipment. You’ll save money in the long run.

However, if you require a substantial amount of equipment, such as 10–20 multifunction copiers for your company, leasing may be a better option. After all, why tie up a large amount of cash when you could use that money to establish or grow your business?

We specialize in helping businesses make the best decisions for their organization. Schedule a complimentary, no-pressure call today. We’ll help you decide whether you should lease or buy, as well as other ways to optimize and secure your document environment.