At the end of a copier lease, or more accurately, about 6 months before the end of your copier lease, most copier companies try and roll their leases into a new lease. This is good for them and there is an argument that in some situations it may also be good for the client. What is the real deal though? If your leasing company offers you a buyout, should you take it?
The first thing you will want to know, is what is the buyout amount? If you return it early, is this number being rolled into the next copier lease?
Let’s say you are paying $225 per month and then you get a lease buyout for $3500. Is this a good deal? We would generally guess that it is not, because the copier you have you will have paid the cost for and this is more or less a way for the bank to make an extra $3500. Now, I don’t blame the bank, who doesn’t want to make an extra $3000 or so. If they said it was $1000 or $1 Out, then, of course there is more to consider.
About the worst thing you can do is to continue paying for the copier at the current rate, unless you are thinking it is 3 months or less.
If you have the buyout and it is $3,500, using the example above, that number would get rolled into the next lease. Using today’s lease rate factor of about .0185 – that would mean the $3500 would add about $65 per month for the next 5 years ($3,885 total). Now this can make sense if the current copier keeps breaking and you are tired of dealing with it, so it is worth paying more to just be done with it.
If you could wait about 6 months, the payment on the next one would be $65 less a month and it would be easier to negotiate better rates as copier companies would not be getting a bogus buyout number from your current supplier.
Why 6 Months Early?
One question you may have is why is my copier company coming to me 6 months early for a “free upgrade?” The answer lies in the idea if you have to make a decision now, then you will more than likely just resign. They can say your rollover is free, but if you are trying to get a competitive quote, we may find they want to charge $1500 to $4000 for an upgrade of the unit. You have no leverage on price if you choose to upgrade your service provider sooner.
So What Is Best?
To us, the very best option is to run your leases out until the end, except in very special cases. In these cases (maybe a manufacturer is doing a massive discontinuation at an amazing discount) and this will more than offset the extra cost that happens when you do the upgrade. So there are cases where it can make sense.
Our general answer is no, keep your copier until the end, even if you can’t lease a copier from us quite yet. Our commitment is always to give you the straight up scoop. If it were us, we would keep ours until the end unless we hated our current copier company or there was an amazing special or an amazing feature that justified getting a new copier.