Key Differences Between Renting and Leasing Office Equipment
One piece of equipment that an office cannot live without are printers and copiers, but the investment needed to acquire one of these office machines can be expensive, especially if you’re looking to bring in a fleet of multifunction printers. Even if your business is in its infant stage, purchasing just one of these machines can take up a good chunk of your working capital.
Instead of having to purchase the machine straight out, business owners have opted to rent or lease their office equipment, which is a smart move. The benefits of going month-to-month will outweigh any purchase that has to be done in full. Additionally, when you lease or rent your machine it allows you to build up your credit score, more accurately forecast your budget, and even out your cash flow each month.
While you might see a lot of similarities when it comparing a lease agreement with a renting contract, there are some differences you need to be aware of. We will go ahead and outline some of the different factors and how they impact cost so that you can determine which option best fits your company needs.
Leasing An Office Equipment
There are a lot of benefits to leasing your office equipment as opposed to buying it. Leasing your copier machine means that you will have more flexibility when it comes to terms, you get better quality service, and you can make bundle agreements so that everything is wrapped into one convenient monthly payment.
As a maintenance agreement goes, this can be included to either your lease agreement or rental contract. Depending on your provider and the type of agreement you set up, you can expect coverage for parts, repairs, toner, labor, travel time, and preventive maintenance. Simply put, the only thing you have to take care of is buying paper and feeding it to the machine while your provider takes care of everything else. Make sure that you are asking the right questions when you begin the process of screening your candidates so that you know what you’re getting.
The three big benefits to leasing your office equipment are that you have more options once your lease is up, which include the following:
- Renew or extend your lease – If you never had any issues with the machine you originally leased, you have the option of extending your lease for another year or more. But if you’re ready for something better with more bells and whistles then you can upgrade your equipment under a new term. This is a better option when you consider that technology is always changing and organizations need to keep up to stay competitive.
- Turning in the equipment – Once your contract is up, the machine gets sent back to the provider. Your obligations to pay for the machine monthly are over and you gain a little more capital.
- Own the machine – If you’re looking to own the machine once your lease has ended, you will have the option to do a $1 dollar buy-out or fair market value. If after all these years, your machine has served you well and really don’t see a need to upgrade, then this may be your best bet. Some vendors will allow a maintenance agreement after your lease has ended ensuring that your machine stays in good condition and operates to the best of its ability.
Monthly Lease Pricing Factors
Different industries require different types of copier machines which leads to different maintenance agreements. The biggest factor is the type of office equipment you choose. Desktop printers are less expensive than multifunction printers because not all of them can scan, fax, email, collage, or staple. Additionally, your maintenance agreement usually is dictated by the usage amount.
Say, for example, that your company has a volume of about 3,000 printers and copies per month. However, another company prints a monthly volume of about 10,000. Whatever your monthly usage is, your provider will charge you accordingly with some variances such as color vs. black-and-white. It’s also good to mention that the more units you include, the better the price structure.
The bottom line is that your leasing cost will be slightly less than renting a piece of office equipment. An additional plus to leasing a machine is that you will also be building your equity. As with any type of agreement you make, breaking the agreement prematurely will incur fines and additional penalties. Only if you’re nearing the end of your lease is when you can upgrade and have the numbers work in your favor.
Renting An Office Equipment
Many business owners will choose to lease because it is a popular option, but some organizations would rather have a more flexible plan in case their needs change. For example, if you’re a startup company it might be a bit harder to predict your company’s future in the next two to three years. Companies that see a surplus in growth the first few years might not be able to upgrade when they are locked in for three to six years. And, if your one of those companies that are just looking to switch out devices between departments you won’t have to worry about the buyout process.
Monthly Renting Pricing Factors
A lot of the monthly lease factors mentioned above can be applied here too such as the type of equipment and usage. You still have to make monthly payments and have the possibility of adding a maintenance agreement. The only difference is that your payments will be slightly higher than a lease. Another factor to consider is that you will not build any equity on this device which means that the company will not have the option to keep the machine once the agreement has ended.
If you’re still unsure whether you should lease or rent your office equipment, we encourage you to speak with one of our experts today. Our professionals will run an analysis to assess your organization’s specific needs. In the off chance you got wrangled into a bad lease agreement, we encourage you to take advantage of our free upgrade program for new customers. Ask one of our friendly staff for more information.