Copier Lease vs. Copier Purchase – Weighing the Pros and Cons

For many businesses, one of the key questions to consider when acquiring a new copier is whether to buy it outright or lease it. It’s an important decision, especially if the copier you need is a commercial-grade color copier that costs thousands of dollars. There’s no universal answer to this question. An outright purchase will be the best option for some businesses, and a copier lease the ideal solution for others – it depends on your specific needs, budget, and other factors. This article unpacks some of the main considerations to help you decide whether a copier purchase or copier lease is the best choice for you.

Total Cost of Ownership – Copier Lease vs. Purchase

Buying a copier outright is the traditional method of obtaining a new copier, and it makes plenty of sense for many businesses, provided they can afford it. Of course, the costs of a copier don’t end at the purchase price.

Maintenance and Supplies

Copiers require ongoing maintenance to stay in perfect working order, and sometimes require replacement of broken or worn-out parts. There’s also the ongoing cost of consumables like paper and ink/toner to consider.

The hassle and expense of copier maintenance and ensuring you have an adequate supply of consumables can be a significant drain on your resources. That’s why a copier lease typically comes bundled with a maintenance agreement, while many copier providers offer maintenance plans to accompany a copier purchase.

For an affordable monthly fee, the provider will monitor your consumables and keep them continuously stocked, while handling whatever maintenance and repairs the machine needs during the term of the agreement. However, whether you purchase or lease, these costs should be included in your total cost calculations.

Large Upfront Payment vs. Monthly Fees

When you buy a copier, you’ll have to pay the full price upfront. But since you’ve paid for the machine outright, there are no extra fees or charges to pay every month. It’s just one payment, and you own the machine outright.

With a copier lease, there’s typically no upfront payment required, although sometimes providers do include a lease initiation fee in the first month’s statement. While this does avoid a large out-of-pocket expense, in the long run, it is definitely more expensive to lease, because monthly finance charges and interest are added to the bill. The longer the copier lease, the lower the monthly installments will be. However, ultimately, the overall costs of a longer lease will be higher than for a shorter lease.

Ownership

When you buy a copier outright, the machine is your asset, and you have complete control over it. You can modify it, sell it, trade it in for a newer model, and/or use it for as much and as long as you like. With a copier lease, the copier remains the property of the lessor until the end of the lease term. You won’t be able to modify it or sell it, and your usage will typically be limited to an agreed rate of output.

Moreover, a copier lease usually runs from three to five years, and most lessees choose to upgrade their machine and sign a new lease at the end of the lease term. The anticipated lifespan of a commercial copier is typically between five and 10 years. So, if your leased copier is still performing well at the end of the lease, you’re effectively losing the residual value in the machine.

However, if you can’t afford an outright purchase or are unsure whether you’ll still have the same printing requirements at the end of the lease, a copier lease may still make much more sense than a purchase.

Tax Deductions

When you purchase a copier, in many cases, you’ll be able to write off the entire cost of purchase in the year of purchase. Otherwise, you’ll be able to deduct the cost of depreciation over a five-year period. Either way, purchasing a copier outright enables you to significantly reduce your taxable income.

With a copier lease, you won’t be able to claim any depreciation costs since you don’t own the machine. However, you will be able to claim your monthly copier lease charges as a valid pre-tax business expense.

Copier Lease End of Term Options

Another factor worth consideration when deciding between a copier lease and a copier purchase is what happens to the machine at the end of the lease. When the copier lease ends, you’ll generally have four options:

• Purchase – You’ll generally be able to buy the copier from your provider at fair market value, which can be negotiated.
• Upgrade – Up to 90% of lessees choose to upgrade to a new copier lease at the end of the term. You’ll lose the residual value of your existing machine, as explained above. However, this option ensures you have the latest technology, which in itself can improve your productivity and streamline your workflow, offsetting those losses.
• Extend – Almost all copier lease agreements require you to notify the lessor of your intention to terminate the lease at its end; otherwise, the lease will auto-renew. The auto-renewal can range from one month to 12 months, with the associated fees and interest being billed throughout. If you’re concerned about losing the residual value in the copier, this can be a good way to extend the value you derive from it cost-effectively.
• Terminate and return – Provided you’ve given the required notice, you can terminate the copier lease and return the copier. Be aware that the costs of shipping are added to your account and can be substantial for heavier machines or longer shipping distances, which can make a significant difference to your total cost/benefit equation.

The Right Copier Lease or Purchase Partner

These are some of the main factors to consider, although there are other nuances that can also affect your decision. It’s best to consult with an expert who can advise you on the best options. And whether you decide on a copier purchase or a copier lease, it makes a lot of sense to choose a provider in your area.

If your business is in Seattle, Tacoma, Olympia, Yakima, Portland, Tri-Cities, Spokane, Bend, Salem, or Eugene, Copiers Northwest is your one-stop shop for copier purchases, copier leasing, and all your office technology and IT needs. We stock a wide range of printers and copiers for purchase or lease, and work with several reputable leasing companies to provide copier lease solutions tailored to your needs and budget. Contact us today for a free consultation.