What You Need to Know Before Leasing a Copier!
Have you been tasked with finding a copier for your company? You have come to the right place. We are here to help, you may want to continue working with your current copier dealer, or you may be looking for a new copier. We thought it would be good to give copier buyers a simple “heads up” on the copier business.
- Copier Leases are not the only way to get service. You can get the same service plans if you decide to purchase a copier as if you decide to lease a copier. We prefer you to be on a lease for a few reasons. For our benefit, it is better if you lease a copier than if you buy it. Once you have an actual contract and service plan, it is unlikely that you will change vendors and that is good for us. Copier leases are good for you in the same way cell plans are, when things are wrapped, you can get a lot better deal.
- In a lease buyout situation (or “free” early copier return) – here is what happens… You get a buyout amount – the amount owed to clear the current lease, and then that number is backed into the new lease. Take for example, you are paying $400 a month for a copier, which would likely be about a $20,000 copier. There are 3 months left, or $1200. The copier company adds that $1200 to say an $8000 copier (prices have come down a lot) meaning it is about $9200 or about $180 per month. So now, you would get a new copier for $180 per month vs $400 per month for the current copier. Had you waited the 3 months, it would have been closer to $155 per month.
- Copiers that are leased are often leased so that tax advantages can happen. The strange thing that we see is a lot of companies lease not for the financial benefits, but because they don’t know they can simply purchase if they want.
- A cost per print plan means you pay a fixed amount per page and get toner, fusers, drums, labor, etc for that price. These days, cost per print plans are nearly always better than toner out, where you buy your own supplies.
- There are leasing “steps.” What this means is that you could get a better rate if you are buying a $3000 to $10000 copier than if you lease a copier with a purchase price under $3000. You can see the lease rate factors on our site to see how this works. For example, If you got a copier for $2900 and FMV for 5 years, it would cost $2900*.0215 = $62.35 per month. If I were to charge MORE – $3001 for the same copier… it would be $3001 * $.0187 = $56.12 — In this case, we can charge $6 less per month by financing $100 more. Crazy, huh?
- On most copier leases, there is a time frame where you must let the leasing company know you are returning the copier. Many folks forget to do this and get stuck with a bad copier for an extra 3 months to an extra year. We suggest putting in notifications in your email telling you to give notification as well as placing a sticker on the copier, “Expires 04/21/2022 if we notify Xerox before 3/20/2022”
- FMV vs $1 Out – What is the Difference? Basically, $1 Out means that you pay $1 and own the copier. FMV means the leasing company tells you what they think is a “Fair” price and you can pay that or send it back.
- You have to pay to ship back the original copier when you are leasing it. Usually costs between $300 and $500. Just because your copier company is taking care of it, doesn’t mean you are not paying, it just means that it was “factored in” to your copier lease.
- Startup Companies – You will normally have to sign a PG, or personal guarantee, meaning if your business fails, you still owe on the copier. 2 years is the magic time-frame before some leasing companies drop that ask.
- Most copier leases carry a “documentation fee,” basically this is just a fee the bank charges to do the paperwork to finance the copier. $49 is the cheapest we have seen. $349 is the most expensive we have seen.
- You are generally required to have your insurance company give you a letter saying the copier will be covered in cases of fires and floods.
If you know these items, you will be more up to speed than 99.9% of customers and probably more than 40% of the copier reps you may talk to. We would love to help you out with your copier lease!