Leasing a copier or printer can be a daunting endeavor.
It can feel a bit intimidating any time you enter into a legally binding agreement that may involve a significant amount of money.
There are a lot of factors to consider before leasing a copier, and we aim to give you a mini guide of sorts to use as you look to decide how you’re going to pay for your next office machine.
As a print vendor for almost four decades, we’ve learned that leasing is by far the most popular way to pay for a machine. But customers typically don’t understand all that they need to know before entering a lease.
You don’t want to be tied down to an unwanted lease, because it can result in wasted money for a machine you decided wasn’t the right fit for you.
So, we’re going to use our industry expertise to educate you on the basics of a copier lease so that all the major questions you have about leasing an office machine are answered.
Let’s start with what a copier lease is before diving into the different types of agreements and what you need to consider before signing a lease:
What Is a Copier Lease Agreement?
A copier lease works in a similar way to a car lease: You pay a monthly payment over an agreed-upon amount of time for the machine that you want.
Breaking down the cost of a copier into monthly payments rather than paying for it upfront is an attractive option for a lot of consumers that don’t want to drop thousands of dollars at once for an office machine.
There are different types of lease agreements that you can choose from, and it’s important to be aware of your options before deciding which one is right for you. Let’s break down the three common copier lease agreements in more detail:
3 Different Types of Copier Lease Agreements
Here are the three most common types of lease agreements in the copier/printer industry:
Fair Market Value
The first lease agreement you need to be aware of is called a Fair Market Value Agreement, also known as FMV or an Operating Lease.
In basic terms, it’s a lease agreement where you have the option to purchase the machine you are leasing for fair market value at the end of your leasing term.
The pros to this option are that it gives you the flexibility to purchase the machine you want without having to commit to its full ownership once you sign your lease. At the end of the lease, there is an option, but not an obligation, to purchase the device.
The Fair Market Value lease is usually the least expensive leasing option, which will keep your monthly payment lower.
Fixed Purchase Option
The Fixed Purchase Option Agreement, also referred to as Term Lease, Dollar Buyout Lease or Capital Lease, is another option for consumers that want to eventually own the machine that they are leasing.
Under the Fixed Purchase Option Agreement, you have the choice to buy the machine at the end of your lease at the fixed purchase price that you and your vendor agreed upon when you signed your lease agreement.
Just like the Fair Market Value lease, the Fixed Purchase Option does not require you to purchase the machine at the end of your lease.
The only difference is you are abiding by the fixed purchase price if you decide to buy your machine rather than the fair market value price.
The third type of agreement is the Installment Purchase Agreement, and it is used for consumers that want to purchase their machine in cash but would rather spread out the payments over a period of time rather than pay in full upfront.
If you choose this option, you will likely pay for your machine within a few months. The advantage of this option is, once you pay for the machine in full, you won’t be in any type of lease agreement and won’t be bound by a term length.
The Installment Purchase option would be best for companies that want to purchase their machine in cash but would rather pay for it incrementally instead of at the full price upfront.
What Do You Need to Consider Before Leasing a Copier?
Now that you know what a copier lease is and have seen the three most common types of lease agreements, let’s go over the three main factors that you need to consider before entering into a contract:
As with any purchase, you first need to consider your budget and how much you can allocate monthly toward an office machine.
But it’s not just the lease payment itself that makes up your total monthly cost. There are other factors that go into the total price you will pay for your machine per month, including:
Your monthly print volume, or how much you print or copy in a month.
Your maintenance contract, which is usually required by vendors to include as a part of your lease agreement.
Any additional accessories or services you might want to include, like managed print services or advanced print tracking.
Your base monthly payment will also depend on the type of machine you lease; bigger machines cost more than smaller machines, and that is reflected in the amount you will have to pay every month.
Read our blog on how much a copier/printer costs to see the total cost of owning a machine broken down in more detail.
To see an estimate of how much a basic copier lease agreement could cost you, see the infographic below:
Your Term Length
After considering your budget, you will need to decide on the type of term length you want to choose for your new copier.
Lease terms are usually broken down into increments of 3-5 years, although some vendors may vary in the term lengths they offer. In general:
Shorter-term lengths would be the better choice for companies that are constantly using the machine at a high volume since service issues could arise as the machine ages or want to stay up to date with the latest technology.
Longer-term lengths would be better for companies with a smaller budget since the monthly payment will be cheaper on a longer lease than a shorter one.
It’s essential to consider which lease term would be best for your company because you don’t want to be stuck paying for a machine that is no longer needed or being utilized in your daily operations.
The Details of Your Lease
The last major thing you need to consider before leasing a copier is the intricate details of your lease agreement.
These aren’t all the details that you need to be privy to, but the major ones include:
Cancellation policies—in case you want to break your lease early, you need to be fully aware of what the financial consequences are so that you’re not caught off guard if you decide to cancel your lease early.
Any taxes that might be included on your monthly invoice, such as a property or sales tax. Some leasing companies will pass on the property tax for the machine they are leasing to you, and that can be reflected on your monthly invoice.
Your end-of-lease options, such as trading in your machine, extending your current lease, purchasing your machine or returning it to your vendor. Read our blog on your end-of-lease options, as this is a crucial element to any copier lease agreement.
Since we’re on the topic of details, you should also know that there are some common fees that you might see come up either before or during your lease agreement.
For instance, there will typically be a one-time Lease Document Fee of around $100 that will likely be billed on your first invoice. There’s also a monthly insurance fee (around $15) that may be required by vendors if you don’t already have insurance that covers your office equipment.
As a best practice, you will want to share your insurance coverage with your leasing company upfront to avoid any duplicate insurance fees.
Read our blog on the 10 hidden costs of owning or leasing a printer/copier if you would like to read more about some of the “extra” fees that come with having an office machine.
Is Leasing or Purchasing a Copier Right for You?
There’s a lot that goes into leasing a copier, and you need to make sure you understand the terms and conditions of your lease before entering into any type of agreement.
Doing so will ensure that you get the right machine in place for your company for a price that you can afford.
As a vendor that prioritizes education as a means to customer satisfaction, we want to give you the resources necessary to make sure that you make a decision that will leave you worry-free when it comes to your office printing equipment.
There are two primary ways consumers pay for their office machines: Leasing the machine or purchasing it outright.
You should look into both options thoroughly before making a decision because if you have the budget and working capital to buy a copier out of pocket, you should do it every time---because it will save you more money in the long run.
Read our blog comparing leasing vs. purchasing a printer/copier to find out which payment option would be right for you.
And if you would like an entire guide that takes you through everything you need to know before buying or leasing a machine, click the image below to download your free copy of our Complete Guide to Purchasing or Leasing a Printer for Your Business.