A copier lease should be used as a means to finance a large amount of money, not to hide actual costs from buyers. Unfortunately, because leasing can be confusing, many companies end up paying more than they should for their copiers. Your organization is likely printing less than ever, especially while people have shifted to working from home, but will this last?
Since regulations are loosening up and we can get together in groups again, companies are faced with deciding how and when to bring people back to the office. Perhaps over this last year, many of your paper-based processes have become digital out of pure necessity, and your print volume will never be the same because of it. Other processes simply had to be put on hold because they required in-person interactions. Telling the difference between the two can be difficult.
It is common practice for the copier industry to try to get companies to upgrade their copiers before their lease ends. You may get approached by your sales rep as far out as two years before your lease ends. Sometimes there are good intentions behind this: your copier is breaking down often, or there is software available on a newer copier that can significantly improve a process workflow. Unfortunately, most times, it is simply to keep you locked into your current vendor. There is no way to get out of paying the full amount for a copier lease. When you get “upgraded early,” all that happens is the remaining payments for your current lease are added to the principal for the new equipment lease. So in effect, you pay double the finance charges for whatever that amount is.
Example: Your monthly lease payment is $400 a month and you have 12 months remaining on the lease. Your copier vendor contacts you and says that you should consider upgrading early because you’ll get a great deal, and they’ll be able to lower your payment by $20 a month.
What happens behind the scenes: They add the amount you have remaining on your lease (in this example, $4,800) to the cost of the new equipment. Then, most likely, one of the following occurs:
- The new equipment costs less to own than your current equipment, even with adding the $4,800 to the price. Thus your monthly payment will be less. But if you wait until the end of your lease, your monthly payment will be even lower because you won’t be adding the $4,800 to that.
- The new equipment cost is comparable to your old equipment, but you save money on the monthly payment even with adding the $4,800 because the terms of the lease are different. For instance, they can give you a longer lease, or your maintenance costs were higher on your previous lease due to automatic price escalations. In either case, your monthly payment would be even lower if you wait until the end of the lease.
Because you are printing less, you will likely not need the same caliber of machine you have had in the past. Over the years, we have seen many times when companies had the copier equivalent of a school bus transporting only one person every day!
Before you upgrade early, I suggest you analyze your invoices over the past few years for how your volume has changed. Most salespeople are used to proposing the latest upgrade to whatever model you have that can print faster, but it may be more than what you need for the future. Do you anticipate more people returning to the office and are unsure how that will affect your volume? Depending on the costs, it may make sense to continue on a month-to-month agreement beyond your lease so you can have a good understanding of where your volume will be before committing to new devices.
For more information on how to make a good decision when it comes to copiers for your office, download our whitepaper "Guide To Understanding Copier Leasing: How To Get A Good Deal & Avoid Tricks!"