Purchasing vs. Leasing a Copier: Which is Best for My Business?

Here at AIS, current and potential clients ask us lots of questions about our selection of copiers. One of the most frequent (and important) questions we receive is, “should I purchase or lease a copier? Which is going to be best for my business?”

If you’ve read any of our previous blogs like this one ("How Much Does a Copier Cost?"), you’ll notice that we often compare how the decision process for buying a new copier is very similar to that of purchasing a new car.

The process, the characteristics of the purchase, and the details for buying a new car and a new copier are closely related. Both a copier and a car can be test driven and seen in a showroom.

They both are a significant investment. Both are built to last and will be used for a significant amount of time.

And, they both (cars and copiers) need to be maintained.  

This is can be a very important decision for your business. For instance, if you decide to purchase a copier and over the next few years, you discover a great business opportunity, and take advantage of it if you had the extra capital (cash). A lease would allow you to do this. Conversely, if you have plenty of cash on hand in your business, you can save money by eliminating interest payments on your next copier by purchasing it.

Years ago, the buy vs. lease ratio for a business was about half and half. Half leased their copier, and the other half purchased these new devices for their office. Back then, a copier just copied.

Today they print, copy, scan, fax, fold, sort, staple, send and more. They have become an integral part of managing the paper flow and electronic files of a business; the cornerstone of an overall document management strategy. That’s why they are referred to as multi-function copiers or multi-function printers (MFPs). If you plan to move toward a paperless office in the future, you’re going to need an MFP.

Today, over 90% of our clients lease their copiers. Why? Let’s look at the differences between a purchase and a lease.

Why lease a copier for my business?

Leasing can offer your business the flexibility of meeting your cash flow needs while wrapping all the other costs like set-up, installation and sometimes service contracts. Leasing offers you the productivity of the equipment/technology you require while meeting cash flow needs. Additionally, “soft” costs such as installation, freight, or equipment setup and service contracts can be included in the monthly payment. These are referred to as “soft costs.”

When you lease a copier, you don’t have to choose whether to purchase yesterday’s technology or a reconditioned model as a matter of cost to fit your budget. It’s much easier to buy today’s equipment and take advantage of the latest technology since you are wrapping this into a longer-term payment program.

When you enter a lease, you sign up to a fixed rate. This means the rate is fixed for the lifetime of the lease agreement. Even if lease and loan rates rise in the future, you are still paying the same rate you originally agreed to at the signing of your lease.

A lease is a proven financing option to conserve your business’ capital when purchasing office equipment or technology. This allows you to place funds in other important areas of your business like labor, inventory, and marketing.

Many times, the buyout is only $1 at the end of your lease you own the equipment. And the way these machines are designed today and depending on your business usage, you may have a device that can be used in a different capacity in your organization while you upgrade to the latest device.

Another type of financing that some businesses look at is a conventional loan from their financial institution or bank. A lease is more attractive since there’s no down payment, won’t tie up your credit lines and (quite often) has a lower monthly payment. Conventional loans can also have a variable interest rate so this can also affect your financing decision.

When you enter into a lease for office equipment like a copier, you can easily add to your copier lease by upgrading your equipment and building it into the term or keeping the same payment amount of your lease.

Why purchase a copier for my business?

If you have the capital (money in your bank account), then the purchase of a copier may be the best route for you to go. The main benefit for purchasing a copier for your business is not having to pay the finance fees or interest charges. This allows you to keep your business running with little or no debt.

Another important factor is that you don’t have to return or purchase anything as it is with many lease programs. Many business owners also take better care of a product they purchase than if they lease it. That’s just what they do.

Here are some things to consider before deciding whether or not to purchase or lease your copier.

• Who’s the leasing company? There are many companies to choose from, and if you’re purchasing from an authorized dealer, they will typically put you in the best program to suit your needs. It doesn’t hurt to ask who the company is, how long they’ve been around and how long your dealer has been doing business with them.

• What’s the term of the lease? There are a variety of options from the length (month and years). Typically, they are between 3-5 years, and the term can have a direct effect on the interest rate and your monthly payment.

• What’s the rate? How much will you be paying on top of the price of your copier over the lifetime of of the lease?

• Can you save extra cash flow by extending the lease a few months? Did you know you can dramatically reduce your monthly payment by adding a few months to your lease? For example, if your offer is for a 3-year lease (36 months), and cash flow is important to your business, ask your dealer to configure the same copier for a 39-month You’ll be surprised at the difference.

• What’s the buy-out at the end of the term of the lease? Will there be a fee at the end of the lease? Will you own the device once you’ve paid off the lease? These are good questions to ask before entering into any leasing program, so you aren’t surprised at the end of your agreement.

• Are there any other “special conditions” like upgrading before the term is over? What happens if you’ve nearly completed a 5-year lease, your business is growing and you need to scale up to a device that can support your new business needs. Do you have to buy out your old lease, before entering into a new lease on the new copier? Find out from your dealer what types of options they can afford you to win your business.

The decision to purchase or lease a copier for your business is an important decision and you should understand the differences between each alternative and how each will affect your business—now and in the future. The right decision will need to meet your financial and business objectives while being an integral part of your business plan.  Do you remember the effect on your family and budget when you decided to purchase or lease your last vehicle?

At AIS, we want to provide our customers with all the options to make the most informed and best buying decisions for office technology purchases.

Here’s a quick action plan:

1. Decide what type of multi-function copier or printer you need. (link to our check list when available)
2. Do your homework and find out who the best copier companies are in your area and what type of support they provide.—The Best Copier Companies!
3. Get a bid from multiple companies in order to get the best price. Just make sure you are comparing apples to apples (keep the playing field level and match feature sets).
4. Look at all the financing options like we’ve described above to make the best decision and matches your business goals.

• If you want to learn more about how to be a more informed buyer for copiers, printers, phone systems or out sourced IT services, subscribe to our blog by adding to your email in the right margin, view our social media links at the top of our page, visit our YouTube channel , or call us and we will be happy to have one of our subject matter experts contact you and discuss all your options.