A Comprehensive Guide to Copier Lease Agreements

Submitted by Mary Eberhart on Mon, 06/21/2021 - 09:00
a comprehensive guide to copier lease agreements

Leasing a copier can sound like an intimidating process. There are some different things that are good to know while going through the leasing process, and if it’s your first time it may seem a bit confusing. We’ve written this article to break down each component of a copier lease agreement and help you through the process.  

 

What Are the Different Types of Copier Lease Agreements? 

Equipment lease agreements typically come in two forms: Fair Market Value, and Fixed Purchase Option Lease. 

 

Fair Market Value

A Fair Market Value lease, also known as FMV or an Operating Lease, is a lease agreement where at the end of the term, the customer has the option to purchase the machine for the fair market value at that time. This option gives flexibility and allows for customers to expense the monthly cost. At the end of the lease, there is an option, but not an obligation, to purchase the device.   

Fixed Purchase Option Lease

You may have heard this called several different names (Term Lease, Dollar Buyout Lease, and Capital Lease), but they all essentially mean the same thing. At the end of the term, the fixed purchase option can be executed, after which ownership transfers to the lessee.   

Installment Purchase

An Installment Purchase is when you choose to purchase your machine in cash, but you opt to spread the payments out over a period of time, usually a few months.  

 

What Do I Need to Lease a Machine?

The first thing you need to decide when considering leasing is your budget. Figure out a monthly budget for all of your printing costs, including monthly impressions and a service agreement. Once you’ve decided on a budget for your machine, then that will determine the length of your term. Below are factors on why someone would choose a shorter or longer lease length: 

  • Shorter 
    • How much your machine is used: if your machine is getting constantly utilized throughout the day, then it’s likely that your machine will have more wear and tear, so you’ll have the need to upgrade to a new device. Opting for a shorter lease term will give you greater flexibility when you decide it’s time to upgrade. 
  • Longer 
    • Price: if your budget is a little tight, you might opt for a longer lease term, which will lower your monthly payment.  

 

Next, the details of the lease, such as cancellations, taxes, and end-of-lease options need to be discussed. In the case of a cancellation, the responsibilities that must be fulfilled by the leasee need to be fully understood, so that there’s no confusion later down the road. End-of-lease options are also important so that when it’s time to either upgrade or seek elsewhere, the process is clear and simple.  

There are different levels of taxes that must be paid, depending on the situation. For example, you might see a property tax on your invoice. This may confuse you, especially if you’re a tax-exempt business, but the tax isn’t for the property your business resides on- it’s for the property of the machine that the leasing company owns. Because they own that device, they are charged a property tax, and they will then forward that tax to the lessee in the form of a fee.  

 

What Should I Expect When Leasing a Machine?

There are a multitude of things to expect when leasing. For example, there may be some extra charges on your invoice, for things like a one-time Lease Document Fee, or an Insurance Fee. To learn more about any hidden charges that might pop up, we recommend you check out our blog, 9 Hidden Costs of Owning/Purchasing a Multifunction Printer. Besides just hidden costs, you can expect to either have one monthly invoice that has your lease and maintenance costs combined, or, in some cases, the lease is billed separately from your monthly maintenance costs. In most cases, you can ask for this to be combined on one invoice. Either way, leasing your office equipment is an easy way to maintain your budget while keeping your office equipment running smoothly.   

 

Overall, leasing is a great way to have the top-of-the-line equipment that your office deserves, without having to pay cash for the entire purchase upfront. Monthly payments keep your budget in control, and the right equipment backed by an experienced vendor will make sure you have exactly what you need for your copier/printer needs. Now that you’re well-versed on leasing, we recommend taking a look at the following articles: 

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