Why Is It Cheaper to Lease a Copier?
When the latest technology comes out, you want your business to have access to all of the innovations. You don’t want to be stuck with a carbon copy of the old. This is especially true with office copiers.
Office copiers are no longer “just” copiers. They increasingly perform other functions that keep your business running, and new technology and new features become available all the time. Choosing a copier lease over a copier purchase allows you to access the latest advances.
In fact, leasing a copier is often the cheaper option, and it offers a host of other benefits as well. Many businesses are already enjoying these advantages. Read on to find out how you can reproduce them for yourself.
The Benefits To Lease A Copier
Most major copier companies offer various leasing arrangements, and the majority of business owners choose one of these options. Should you follow their lead? In most cases, the answer is yes. Leasing a copier offers several advantages over purchasing the same equipment.
Little to No Upfront Cost
Copiers are expensive. Prices vary across retailers and brands, and factors like copier speed and output also play into the equation. Still, some generalizations are possible.
You can find the smallest, slowest, and most basic models capable of printing about 20 pages per minute (ppm) and making about 10,000 copies per month for as little as $1,500. However, these basic models are unlikely to satisfy all but the smallest business’s needs.
Businesses seeking a middle-of-the-road model with moderate output and speeds around 35 ppm can expect a purchase price of at least $10,000. Higher-end models with the greatest output and highest speeds of 60 ppm or more can cost upwards of $50,000.
Whether $10,000 for a small- to medium-sized business or $50,000 for a larger business, the purchase of an office copier requires a significant upfront investment. Many businesses simply don’t have the means to cover it. While financing can be an option for businesses choosing to purchase an office copier, the interest involved is another added cost.
Fortunately, leasing presents a different — and more beneficial — set of options and considerations. Businesses that choose to lease a copier pay no upfront expense. They simply make a monthly payment, which is predictable and makes for easier budgeting. This is, again, an ideal option for businesses that don’t have the immediate cash flow to cover a copier purchase.
Access to Higher Quality Copiers
Even if your business can afford to purchase a copier, that doesn’t mean that it should.
Let’s say you’ve decided that you “can” afford to purchase a copier. What exactly have you decided you can afford? With a purchase as large and expensive as an office copier, you’ve most likely decided that you “can afford” one of the cheapest (read: lowest quality) models. With a lease, however, you can get a higher quality copier with more features. Simply put, you expand your range of options.
Whether you can “afford” it or not, a copier purchase also ties up a significant chunk of cash that you could use elsewhere. Not sinking $50,000 into a copier purchase means that you have money free to invest in other office upgrades, like improved network connections.
By improving efficiency, these upgrades and enhanced features further enhance your bottom line. According to a 2020 PricewaterhouseCooper survey, businesses are looking increasingly to these operational efficiencies to drive growth.
Access to the Latest Copier Technology
It’s a sad fact with major purchases, like cars, computers, and yes, office copiers: your “new” purchase — even when it’s of the highest quality — is outdated almost as soon as it leaves the showroom or warehouse.
The lifespan of the average office copier is between four and seven years. Most estimates suggest businesses can expect to keep a copier in working order for about five years. However, “in working order” and “state-of-the-art” or even “up-to-date” are two very different measures.
Your copier might “work” for five years, but with the release of new technology on a daily basis, it does its best work — and it remains the best option for you — for a much shorter period of time.
By purchasing big-ticket items, like an office copier, however, you’re essentially committing yourself to a longterm relationship with a rapidly aging piece of machinery. The immense upfront cost locks you in, and you can’t consider severing ties until the equipment has “paid for itself.” So you ignore signs you should replace your old printer for longer than you should. In doing so, you ignore technological advances that could benefit your bottom line.
Choosing an office copier lease allows you regular access to these technological advances. Because you haven’t sunk tens of thousands of dollars into the purchase of an office copier, you’re making a much shorter commitment, and you can explore new and better technology — the newest, fastest, and most efficient copiers — much more quickly.
Fewer Costs Over Time
Choosing a copy machine lease and being able to replace an older and slower copier more quickly ensures that your business isn’t sinking money into old equipment.
As your copier ages, you’ll not only find yourself tantalized by state-of-the-art features on newer models. You’ll also find yourself frustrated by the decreased efficiency of your older model. In fact, copiers become slower as they age. They also become more expensive, demonstrating higher per-page printing costs over time.
Maintenance costs are another consideration. Lease agreements cover maintenance, including routine upkeep and supplies, like toner, and ongoing service, parts, and labor.
Copier purchase arrangements can include warranties, and you can usually choose to purchase an additional service contract. However, these service contracts are, again, an added cost. They also may include hidden costs if you are required to take the faulty machinery to a regional facility or even send it back to the manufacturer at your expense.
Over time, a copy machine lease also saves you money on taxes. Your monthly lease payments are a pre-tax business expense. This means that they are tax-deductible, and you can deduct the entire payment each month.
In contrast, when you purchase a copier, you’re purchasing a depreciable asset. This means that you can only deduct the depreciation value each year. Even in the first year, this “value” is significantly less than the purchase price (often around 40%) and decreases significantly from there.
Deciding to Lease: What Are Your Options
For many businesses, a copier lease makes much more sense than a copier purchase. Once you’ve made the decision to lease, however, you’ll still have other decisions to make.
Length of Lease
At the very least, you’ll need to decide on the length of lease that’s best for your business. Copier leases usually range from 12 to 60 months. Longer leases mean smaller payments but bigger long-term costs. They can also lock you into older technology for a longer period of time. Some companies offer the option to roll an older lease over into a newer one before the term ends, though. So this is a question to ask when exploring your options.
Cost of Lease
A significant benefit of copier leasing is the cost. While purchasing a copier means shelling out $10,000 to $50,000 upfront, lease payments are much more manageable.
Again, variation exists. In general, however, monthly copier lease rates range from $50-100 a month for the smallest copiers. High-volume copiers are available for lease for $200-400 a month. High-end copiers will cost $500-1000 a month.
Type of Lease
Two main types of leases are available: capital and operating leases.
Operating leases are the simplest and, generally, least expensive option. With an operating lease, your monthly payment allows you to use the copier for the term of the lease.
Capital leases have higher monthly payments and include the option to purchase the copier at the end of the lease for a marginal cost (often $1). In essence, capital leases are similar to rent-to-own arrangements.
If you choose an operating lease but decide that you do want to keep the equipment at the end of the lease, you can still investigate buyout options. Most operating leases allow you to purchase the old equipment at the fair-market value when the lease expires. Again, though, better copiers with newer technology will almost certainly be available by this time, and a new lease likely remains your best bet.
Copier company policies vary in terms of automatic renewals, escalation fees, overage charges, and lease flexibility. So it’s always a good idea to ask about these provisions before signing an agreement.
Finally, when you lease an office copier, you will likely still have to insure it. Most standard business insurance policies cover office equipment. Be sure to check with your insurance company taking responsibility for your new copier.
A Plan to Lease: It’s Time to Copy the Benefits into Your Business Plan
The benefits of a copier lease are significant. Most significant are the financial benefits, which include lower upfront costs, tax savings, and ongoing efficiencies. Leasing a copier also allows you timely access to the latest technology.
When you’re ready to incorporate these benefits into your business plan, contact Visual Edge IT for a quote.