Minnesota Copiers Blog

The Small Print - Copier & Printer Lease Contracts

Posted by JR Copier MN on May 5, 2016 7:41:08 AM

lease contract copier mn.pngWarning: Don’t let your current copier vendor coerce you into signing another Copy Machine Lease contract before your current contract is up.   Normally your sales rep will visit you within 6 months of the expiration of your copier lease.

Do not sign a new lease 3 - 6 months before your existing lease expires!

Many office equipment companies will approach you 3-6 months prior your lease expiration on your existing equipment, that way you can not get a fair bid from any other office equipment dealer.

Should I lease, rent or buy a copier?

This is often the most difficult question asked when making this decision. Here is some advice. Typically it makes sense to lease a machine if you are confident that you are capable of paying your monthly payment, each month on time, for the entire duration of that lease term. It also makes sense to do this if you are trying to conserve capital for other expenditures. Leasing (and renting) also qualify differently for deductions; under most standard accounting practices leasing and renting a copier can be written off entirely each month whereas a direct purchase must be depreciated over time. However, Election 179 counters this measure; consult with a CPA or tax attorney for specific details.

Renting a copier is great if you are sure you only need a machine for short duration and will not have a need for its use again over a long duration. Renting is very popular with trade shows, accounting practices during tax season or law firms who take a large case and need additional resources quickly. Typically renting involves a monthly rental fee that is fully inclusive of a pre-determined page / copy volume, toner, parts, labor, service etc. There are is also a delivery and pick up fee that apply as well.

Buying a copier is in most cases the most uncommon practice because you immediately own the machine from the minute you pay for it.

Service agreements are the second largest decision to make when purchasing a copier. Service agreements are basically a warranty for the equipment that you pay for monthly, that includes a certain page volume and all toner, parts, labor and consumables. In most cases it includes everything with the exception of paper and staples. Many buyers get easily misled here with service contracts; you do not need to lease a machine just to get a service contract. You can still get a service contract if you purchase a machine as well. Many dealers will bundle a service contract into the copier lease but this is NOT a good practice. Here is why-

Advantages to bundling a service or maintenance agreement into a copier lease:  Also known in our company as “Golden Handcuffs”

You get 1 invoice every month instead of two. That’s it.

At JR Copier of MInnesota., we believe in the most ethical approach, which is NOT bundling your service contract into your lease.

Disadvantages to bundling a service or maintenance agreement into a copier lease:

1. The page volume is set in stone at the time of lease inception (so, if you “think” your volume will be 5,000 black and white pages per month and 1,000 color) then you sign your life away when you sign your lease. If you are wrong, and your true volume turns out to be 3,000 b&w and 100 color, tuff cookies! You signed up for 5000 and 1000 so that is what the bank will bill you for. This is often discovered after a few months into a lease, where a desire is expressed for change but, tuff cookies. The banks do not care, and you signed a contract which means you must pay it.

2. You get 2 invoices every month instead of 1.

3.  You are locked in with the service provider and will NOT be able to transfer service elsewhere if you are not happy.

When does leasing a copier not make any sense?

If you are the owner of a new business and are concerned about long term survival,  a lease may not make sense. A copier lease is almost always impossible to break, so if long term commitment is not in your future, then leasing is not a good idea. Additionally, most new businesses can have difficulty getting approval from a bank for a lease; expect to sign a personal guarantee if you have been in business under 2 years and are trying to get approval for a lease. Also, if your business makes fewer than 700 copies a month, it may not make sense to enter a leasing contract for a business-level or multifunction copier. You might consider buying an all-in-one copier, which is a smaller, usually desktop copy machine that can print, copy, scan, and fax just like a multifunction copier but at a slower speed. Make sure to look for a laser all-in-one copier rather than an inkjet copier, because inkjet ink is more expensive than laser toner. Inkjet printers have a price per page of around .20 cents, compared to laser printer pages which cost about .06 per page.

How much does it cost to lease a copier?

Most businesses pay an average between $100 and $650 a month to lease a multifunction copy machine.  At JR Copier of Minnesota, we have leasing solutions that begin at $50.00 per month.

What is the average length of a copier lease?

Most leases conform to 12, 24, 36, 39, 48, 60, & 63 month terms. The most common lease chosen in the industry is 36 months FMV.

Copier Printer & MPS

Topics: Copier, lease, Laser printer

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