Factors to Consider before Signing a Copier Lease Agreement
Technology has not fully digitized business and most businesses and organizations still heavily rely on print. Signing a copier lease agreement can make a lot of sense for your business, as financing provides organizations with the hardware needed to drive productivity, without a large financial capital outlay upfront.
Below are 5 thing to consider before Signing another Copier Lease Agreement.
5 Things to Keep in Mind before Signing a Copier Lease Agreement
1. To Own, Purchase or Return? That Is the Question
Copier leases are traditionally offered in two forms: $1 Buyout or a FMV (fair-market value). In a $1 Buyout Lease, your organization essentially purchasing the hardware for $1 at the end of the term. While this option turns a leased hardware into an asset, $1 Buyout Leases run at higher interest rates. Furthermore, the machine may not be worth keeping after the lease term depending on page count & operating costs at that time.
With a FMV Lease, you have to option to purchase or return the unit at the end of the leasing term. Although you now own it, you’ll still need to maintain the unit and if the machine is being returned, it must still work. Older MFP devices may develop mechanical problems frequently if they are not regularly serviced, causing down-times that creep up on you, so its best to have the unit under a service agreement for the entirety of the lease. If you don’t purchase the unit, you’ll be responsible to return it to the vendor & the associated cost of doing so. A local copier dealer can provide this service, or include it with a new copier lease.
2. Auto-Renewals Are Part of the Copier Lease Agreement
Most leasing companies will include an automatic renewal in the lease agreement. A reply period will be mentioned in the lease agreement, where you need to inform the leasing company of your intent (to return or purchase). This period is typically 90-300 days from the end of the term.
Missing the deadline to cancel the agreement could mean you end up renewing the lease for up to a year. As the terms are so long, forgetting to cancel happens more often than not. A good copier dealer should inform you of this and even remind you to submit the letter of intent.
3. Service and Maintenance Agreements Can Chain You In
Copier dealers will try to include their service agreement in the lease agreement. While this may be spun as “you’ll only have one payment,” this can make it difficult to change service providers mid-lease. As the lease agreement is a legally binding contract, you become stuck with poor quality service or support. Creating a situation that could have you spending a lot of time researching how to get out of a copier agreement.
Splitting the copier lease and maintenance agreements into separate contracts, you’re free to change service providers while retaining the original equipment. This kind of structure gives you room to move if you are not getting the service levels you expect and want to change providers.
4. Managed Print Solutions – Flat Cost per Print versus Base Rates
Copier service agreements are typically offered by a base rate. For $xxx all supplies, service, and labor included with xxx number of pages per month/quarter/year. In some cases, you may opt for a flat Cost per Print solution. With a flat cost-per-page structure, you only print for what you pay, but the offered rate may be higher than a base rate option.
Either structure may work better for your organization, but a discussion should be had before signing an agreement.
5. Questions Are Good – Assumptions Are Bad
Always ask your prospective vendors as many questions as possible. Never assume that things are included or bundled with the deal. Fine print and hidden costs can accrue quickly, leaving you stuck in a business relationship that serves only one side.
Taking note of what exactly you’ll be paying for, what the end of the term will bring, and what level of support you’ll be getting requires a thorough amount of investigation.
Being Certain about Copier Lease Agreements
If you are still not sure what the best option is for you, get in touch with Office Technologies to assist you with making the right decision. With years of experience delivering the latest office support technologies to our customers, we’ll guide you to the best business option for your organization.
Utilizing the latest manufacturing technologies, we’ll provide you with a complete and comprehensive solution. You’ll need a partner that integrates with your current business processes and drive down the costs while keeping your staff productive.
Send us a message online or call us at (610) 326-4700.