Exploring Office Copier Leasing Options – Which is Right for Your Business?
Investing in a new copier for your office is an essential expense, but it can also be a significant expense. Depending on what type of copier and copier accessories your office needs as well as what make/model you choose, the cost for a new office copier can sometimes catch people off guard. However, the price tag that can sometimes accompanies a new office copier shouldn’t deter you from acquiring the tools necessary for your business to thrive and be productive. This is when office copier leasing can be very beneficial.
Office copier leasing options make the investment into your office printing technology much more manageable and can even be strategic. With several options to choose from, there is certainly a lease option that will fit your organization’s budget and needs. Keep reading to learn more about the different options for office copier leasing, which option will make the most sense for your business, and when it is most advantageous to choose financing over outright purchasing.
Key Considerations for Evaluating Office Copier Leasing Options
Before we dive into the different office copier leasing options, it’s important to talk about how office copier leasing works and key considerations to keep in mind when evaluating your options. When you’re in the market for a new office copier or printer, and you don’t want to spend the cash upfront for one reason or another, leasing is a great option. Leasing an office copier is very similar to the way you would lease a car – you make a fixed payment for the use of the device, without the need for any type of down payment.
When evaluating different office copier leasing options, there are three important considerations to keep in mind:
1. What is your budget?
Your budget for an office copier lease payment will help you to determine the frequency of which you’d like to make payments (monthly, quarterly, annually, etc.) as well as the term length for your lease. This may also impact your decision of which type of lease you choose.
2. How long do you expect to use the equipment?
Are you the type of business that requires the latest technology updates and likes to upgrade your equipment every 3 to 5 years? Or do you like to get the most out of your office technology equipment and use it until it goes end of life? How long you expect to use your office copier will greatly influence the term length of your office copier lease as well as which type of lease you choose.
3. Do you want to own the equipment at the end of your lease?
Similar to the consideration for how long you expect to use the equipment, knowing from the get-go whether you want to own the office copier at the end of your lease or if you would want to upgrade to a newer model at the end of your lease should definitely influence the type of office copier lease you choose.
Office Copier Leasing Options: Fair Market Value vs. $1 Buyout
Now that we’ve covered the three key considerations to keep in mind when evaluating different office copier leasing options, let’s review what those options are.
1. Fair Market Value Lease
A fair market value (FMV) lease, also sometimes referred to as an operating lease, functions similarly to a rental agreement. With an FMV lease, you do not own the equipment that you’re leasing. You will make fixed payments for the duration of the lease term, and at the end of the initial lease term you have three options. You can 1) purchase the office copier at the current fair market value (which is where this lease type gets its name), 2) continue making your fixed lease payment to continue using the office copier, or 3) you can opt to return the office copier.
2. $1 Buyout Lease
A $1 buyout lease, also referred to as a capital lease, functions similarly to a loan. With a $1 buyout lease, you do own the equipment that you are leasing. You will make fixed payments for the duration of the lease term, and at the end of the initial lease term, you will own the equipment outright after buying out the remainder of the lease for, often, $1.
Fair Market Value Lease vs. $1 Buyout Lease: Which to Choose?
Choosing the right office copier leasing option for your business comes down to evaluating the pros and cons of an FMV lease versus a $1 Buyout lease against your key considerations. An FMV lease is going to be more affordable and offer you a lower fixed payment than a $1 buyout lease. An FMV lease is also more flexible in that you have multiple options to choose from at the end of the lease term – you can purchase the equipment, continue to use the equipment, or return the equipment. On the other hand, a $1 buyout lease is going to offer excellent tax benefits and you own the equipment.
So, which office copier lease option should you choose? An FMV lease makes the most sense for businesses that like to stay current with the most up-to-date technology or businesses that are looking for the lowest fixed payment based on budget. A $1 buyout lease is going to make the most sense if you intend to use your office copier for a long time (well past the chosen lease term) and your budget allows.
Regardless of whether you choose an FMV lease or a $1 buyout lease, lease term options range from as little as 12 months to 63 months, with the most typical options being a 36-month lease (3 years), 48-month lease (4 years), or 60-month lease (5 years). You can also choose from monthly, quarterly, or annual payments typically (though this will depend on the leasing company you are working with). The shorter the lease term, the higher your fixed payment will be, but you will pay less for the equipment overall. Therefore, it’s again important to consider how long you plan to use the office copier for as well as what your budget allows so that you can not only select the best office copier leasing option for your business, but so you can select the lease term that is going to make the most financial sense for your business as well.
When Does Office Copier Leasing vs. Purchasing Make Sense?
Choosing to lease your new office copier makes the most sense for businesses that need to balance the need for essential equipment with cash flow management and/or technological adaptability. Here’s when an office copier lease makes the most sense:
- Preserve Cash Flow: Leasing allows you to avoid large upfront costs, freeing up capital for other critical business needs.
- Access to the Latest Technology: If your business prefers to be on the cusp of cutting-edge print technology, leasing allows you to upgrade to the latest copier models more frequently without being tied down to aging equipment.
- Flexibility: For businesses experiencing growth or changes in operations, leasing provides flexibility. You can adjust your copier needs at the end of the lease term based on your requirements at that time.
On the other hand, purchasing your office copier outright will always be the lowest overall cost option. Here’s when you should consider buying your office copier outright over office copier leasing:
- You Have the Capital: If your business has the cash reserves to make a larger purchase, buying your office copier outright will save you money in the long run.
- Long-Term Stability: If you’re confident that your copier needs won’t change for several years, purchasing will be more cost-effective and economical than leasing.
Summing It All Up
By carefully evaluating your options against the three key considerations around choosing a new office copier as well as your business goals, you can make an informed decision about whether to lease or purchase your office copier, and which office copier leasing option to choose should you go that route.
If you’re looking to delve deeper into a specific leasing option or discuss which option would be right for you, the team at Parmetech is here to help! We can help you to decide which office copier will be the best to choose for your office needs, as well as help you to find the best payment option to fit your budget and your needs. Give us a call at (800) 727-6383, send us an email to info@parmetech.com, or connect with us through our website to get the conversation started!
