When you’re looking into new or refreshing your digital copier technology it is only natural to want to get the best deal for your money, but you want to make sure you are asking the right questions to make sure you are working with the correct company.
First off make sure you are given a and don’t be afraid to ask about the term s of the lease such as:
Business Tips | Best Questions to ask When It’s Time to Lease a Copier or Printer
What is the end of term details, when will I need to notify the lease company if I am not renewing the current lease?
Many companies require a 90-to-120-day notification clause to send in a letter of intent or their may be a penalty associated with the final buy-out.
The letter of intent is to let the lease company know that you will not be renewing the current lease program and will either be returning it our refreshing the technology. It is not required for the finance company to notify you of the expiration of the lease always assume that the responsibility for keeping track of the end of term is yours to avoid any additional charges.
What happens to the equipment at the end of the lease?
At the end of your lease there are a few options to consider, if you decide to change your leasing partner then you will be responsible for sending the copier back to the lease company, they still own the asset and typically will want it back.
If you stay with the current lease provider, then often they will take care of the shipping at no cost to you. If you opt to close your business at the end of the term you will still be responsible for sending the equipment back to the lease designated warehouse. The cost associated is dependent on the size of the machine and where it is going.
The average cost is $300.00 to $500.00 per machine. Make sure the equipment is insured through the shipping company or you buy the additional insurance offered from the lease company.
Are there any price increases throughout the term of the lease or any hidden charges?
Lease companies will add an origination fee or document fee for the 1st payment of the lease and that can vary dramatically from $75.00 to $350.00. The lease payment should stay consistent through out the term unless other wise stated in the term of the lease.
Should I include service in my lease agreement?
Going through the details on the lease are imperative to make sure you understand what is included and the terms. There is one point that I strongly recommend, never include the service and supplies in your lease agreement and here is why: If you have every leased a car, do you buy the maintenance, oil changes and gas upfront for the term of the lease? That sounds a little crazy right? Then why would you pay for this service up front for your office equipment?
Here’s a great example, Smith Company has a 5-year lease with an office equipment provider. They signed up for a program that includes the lease and the minimum base for the service and supplies.
Two years into the lease program, they are not happy with the service they were getting and want to change to another company that is authorized to service and repair the same equipment.
Unfortunately, they have already committed legally to a monthly payment which includes the lease, service and supplies. The lease company is not concerned about the machine not working, you the customer have committed to a monthly fee and that is what they will be collecting.
The lease company has no way to back out the service and supplies and will not be interested in lowering your monthly payment. Another effect of combining the two is that if you committed to a FMV (Fair Market Value) lease program (explained below) at the end of the lease, and you opt to buyout the equipment the FMV lease program is based off the percentage of the original amount financed.
If you included the service and supply agreement your buyout to own may be double of what it would have been if you had to buy out just the FMV of the cost of the equipment.
Protect yourself by always requesting that the service and supplies be billed separately from the lease company and the digital copier company that is suppling the service and supplies.
Also, look for a company that offers an All-Inclusive Monthly Service and Supply Contracts that has the option to cancel for any reason at any time with a 30 day written notice. If that is not an option do not sign a contract for service or supplies for longer than 12 months.
Does the company you are working with have 30-Day Unconditional Money-Back Guarantee if you decided for any reason that this is not the correct machine for your organization?
Make sure you have it in writing the ability to upgrade your equipment in the first 30 days if for any reason you feel it is not the correct machine once it is installed and you have started using it.
Fair Market Value, or Dollar Buyout Explained:
Option #1 – FMV
This lease program is the best lease program if you are not planning on keeping the machine at the end of the term. It typically is the lowest monthly investment. You do have the option at the end of the term to buyout the lease for 10 to 15% of the original fair market price determined from the lease company. Although the lease companies are always changing and have encountered competitive Fair Market Value buyouts as high as 50%.
Option #2 – Dollar buy-out
This lease is designed for the company that wants to have ownership of the equipment at the end of the lease with a payment of $1.00. The lease rates are higher than the FMV lease programs.
Recapping the questions you should ask before you sign a copier lease contract.
- Ask for lease price on 36/48/60 months for equipment only.
- Is this lease a FMV or a $1.00 buy-out lease program?
- Ask for the service and supplies costs per page for the next 36/48/60 months if the volume agreed on, remains the same.
- Ask if they offer a service guarantee on the equipment for the term of the lease or at least five years if you opt to purchase the machine.
- Always ask for references that you may contact regarding their service.
- Ask for a copy of the Lease so you may review and compare it to others.
- Always make sure you have in writing any changes to a contract and don’t take for granted that what the salesperson is saying will hold up on a contract unless it’s in writing. Your salesperson may not be the same from the start of the contract to the end.
- Choose a company that you have checked referrals, has an awesome history of great customer service and you can trust.
By following the above practices, you will receive competitive quotes that are easy to compare and will quite possibly prevent unpleasant future implications.