Would It Be Better To Rent Or Buy Your Copier?

Every business needs a copier; most need several, to be honest. Today, multifunctional copiers can print, fax, copy and scan; it’s easy to see why office life just couldn’t work without them. There are two ways you can supply your office with copiers – you either buy them or lease them. Both have their pros and cons, which will be discussed in the following text.

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So, what are the advantages of leasing a copier?

Your equipment will never be obsolete – Today, computer and other tech related equipment becomes obsolete in a relatively short period of time. By leasing your copier, you’ll ensure you always have an up-to-date machine. Usually, lease contracts are signed on a one to three year period; after the lease expires, you can lease better, newer, faster and possibly cheaper machine. The American Equipment Leasing Association conducted a survey in 2005: 65 per cent of respondents stated that the possibility of having the up-to-date, latest equipment is the biggest benefit of leasing.

You’ll always know how much you’ll spend – The cost of a lease is always pre-determined, and this will enable you to balance your budget easily; the previously mentioned survey conducted by the ELA stated that the predictability of costs is the second biggest advantage of leasing. And there’s no paying in advance, which is important for many small companies which always struggle to balance their monthly budgets. Leasing can get you a decent modern multi-function machine for 150 – 250 dollars a month.

When it comes to copier maintenance and unexpected malfunctions, lease companies will cover costs for major parts, especially those which are expected to last a limited period of time, and will include free service calls and check-ups. Not all malfunctions are covered, of course, but a large majority is.

The disadvantages of leasing are pretty straightforward – you’ll spend more money in the long run and you’ll have to keep paying even if you’re not using the machine anymore. This depends on your lease contract terms, but chances are you’ll have to make arranged payments for the entire contract period, even if you’re no longer using the leased machines. This can happen if your company is slowly becoming paperless which is an emerging trend in the modern business world.

Buying, on the other hand, has numerous advantages:

It’s simpler and faster than leasing – You just need to determine what you need, go to a specialized store and make the purchase. Leasing involves a solid quantity of paperwork (leasing companies often demand financial information and sometimes even ask where and how you plan to use the equipment they’re providing). Sometimes the lease terms can be a bit tricky and hard to negotiate, but if you don’t do it properly, you could end up with equipment which doesn’t fit your needs, or paying more than you really should.

On the other hand, there are several reasons why buying a copier is not a wise option nowadays. Tech equipment is not cheap, and buying it all at once will cost you a large sum of money; money you could use elsewhere, especially if your company is still starting out or facing financial problems. Not to mention you could end up with obsolete equipment in two years or so as copier technology moves forward.

All the maintenance is up to you – Sometimes, a lease will oblige you to maintain the leased machines according to the leasing company’s specifications – which can be expensive. When the equipment is yours, all the details regarding maintenance (schedule, costs, check-ups) are totally up to you.

Note there is also an option of renting a copier – Renting is more common when you need a copier for some short-term projects or events or when converting paper documents to digital files. It’s usually more expensive then leasing, but it’s not a long term commitment – the rental lasts from one to twelve months. Usually you will get a decent but used copier suitable for most businesses.

Lease now, buy later - Sometimes copier companies will offer you a buyout option after your lease has expired. This option is fairly popular as people generally like to keep the copier they had grown accustomed to. Usually there are two buyout options – a $1 buyout and a FMV (free market value buyout). FMV means you can purchase the machine for its fair-market value (the 1$ buyout is pretty self-explanatory!). The catch is that the buyout terms and conditions are arranged before you sign the lease and they are devised in a way that monthly payments on 1$ buyout leases are significantly higher than those on FMV leases.

Bear in mind there are two types of leasing – a capital lease and an operating lease. A capital lease is basically like a loan – the leased equipment is considered an asset on your company’s balance sheets, which means you’ll be getting benefits such as tax depreciation. This type of lease is most often five years long. If you go with an operating lease, the leasing company retains the ownership of the equipment and it is considered an operating expense, not a depreciable asset, which is important for tax purposes. This type of loan is more popular among small companies as it is shorter (it lasts up to three years) and it doesn’t tie-up company funds.

A few things you should pay attention to:

- Lease is not wise if your company makes less than 800 copies per month. Instead, buy a smaller all-in-one copier machine, which is smaller and slower than an MFP, but will probably suit your needs.

- If you do lease, always look for a multifunctional laser machine (presuming you’ll mostly print text documents), as laser toner is cheaper than inkjet ink. A page costs about 6 cents if you print it with a laser copier and about 20 cents if you use an inkjet device.

- Buying a used copier is a viable option if you don’t want to spend much and your printing needs aren’t high – we recommend purchasing it from a specialized dealer rather than an individual owner, as you will get a warranty.

 

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