Buying vs leasing a copier - what's the right choice for your business?When it’s time to upgrade your office’s printers, your two basic options are:

  1. Buy

  2. Lease

Each approach has its advantages and disadvantages. There’s no “right” choice for every business. Here’s a high-level overview of your options.

Buying, Leasing, and Your Budget

If you choose to buy a printer, it’s important that your purchase fits your budget while meeting your functionality and output needs. Many small businesses don’t have $10,000 (+/-) to purchase a new printer outright.

When you lease equipment you pay one monthly cost, however, over time you may end up paying more than the printer is worth. On the other hand, no out-of-pocket expenses can help with cash flow, especially if your business requires a mid to high volume printer. Leasing equipment allows smaller businesses to acquire sophisticated technology they otherwise couldn’t afford.

Speed to Purchase

There’s less paperwork involved when you buy a printer -- you pay and the equipment is yours.

To lease a printer, your company will have to fill out paperwork to apply for a lease and be run through a credit check.

Death and Taxes

These are two of the essential facts of life. When you buy a printer, most or all of the entire cost will be tax deductible. If you lease, you can deduct the amount of payments for the calendar year.

Check with your tax professional for complete details, especially since new rules (Topic 842) for leasing office equipment will go into effect in 2019.

Flexibility and Ownership

Buy a printer and it’s yours. Given the functionality and dependability of printers today, if serviced regularly, many printers can remain useful assets long after a lease would be over.

Additionally, you don’t have to worry about returning the equipment to the leasing agent when the lease ends -- which can save you hundreds of dollars in shipping costs, depending on the size/weight of the printer and distance you would’ve needed it shipped.

If you do want to upgrade to new equipment, you can trade-in your printer (similar to trading in your car for a lower price on a new one) to either purchase a new one or enter into a lease with lower monthly payments. You can also sell your equipment when your company outgrows it.

With a lease, however, you can upgrade equipment at the end of the lease. Some companies will even work with you to upgrade equipment during the original lease (be careful here, some copier dealers will tack on additional fees and extend the lease longer than you had planned for -- make sure to understand the new terms if you decide to do this).

Depending on your business needs, the equipment you purchase can be useful for a decade. If your business is growing rapidly, you run the risk of getting stuck with equipment that can’t keep up with your output needs. In this case, a lease might be the right choice for you, so you’re always on the cutting edge of printer technology. If you think you’ll need greater printer functionality on a regular basis, a short-term lease may be more appropriate. Leases are usually 24, 36, 48, or 60 months long. Of course, the longer the term, the lower the monthly payment.

You can also choose to purchase your leased printer upon the end of the lease. Be clear up front about the type of lease you need -- $1 buyout or FMV (fair market value). FMV leases tend to have lower monthly fees with the expectation that you’ll lease new equipment. Dollar buyout leases tend to have higher monthly fees on the expectation you’ll purchase the equipment for $1 at the end of the lease. You can purchase an FMV-leased printer at 10% to 15% of the original cost of the equipment upon lease end.

Strict Lease Versus “I Bought the Wrong Printer”

First of all, let me say that you should do the appropriate research to identify the right printer for you (13 Printer Buying Tips to Prevent an Unlucky Printer Purchase). A good copier dealer will ask you questions about your company and goals to help guide your decision.

However, keep in mind that there aren’t any “out” clauses in a lease. If you try to end a lease early because the equipment isn’t meeting your needs, you’ll incur a significant penalty.

If you purchase a printer that’s less-effective than you need, you do have the choice of selling it or using it as a trade-in for new equipment.

End of the Lease

Most copier leases require you to take action to notify your lender that you want to end the lease. Depending on the fine print, the lease could automatically roll over monthly or even for an entire year. Beware!

Of course, this isn’t an issue with a printer purchase.

Which Is Right for You?

It’s impossible to say which option is the best for every company. I can only encourage you to do the research, understand your lease options and then make the best decision for your business.

The decision often boils down to a cash flow question -- are you better off keeping cash on hand or would you rather avoid incurring another monthly payment and the finance charges that come along with it?

Need help making the decision? Our copier and printer experts are ready to answer any questions you might have.

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