Month to Month Leasing vs. Starting a New Lease - Which is More Cost Effective?
In six months, the lease on your copier will end — and it is about time too! You’re ready to stop worrying about it, and simply leave your machine to its own devices. Your copier works fine, it does everything you need it to do, and your monthly invoice fits perfectly within your budget.
You remember the last time you were shopping for a copier, and it was a hassle. You aren’t ready to begin another lease, especially when your copier is working perfectly — plus, you do not want to spend more per month.
A new lease will always be more expensive than keeping an old machine, right?
The quick and honest answer is this: a new lease on a comparable machine will almost always be less expensive than keeping your old machine. Let’s dig into why.
THE END OF A LEASE DOES NOT MEAN YOU OWN YOUR COPIER
If your lease type is fair market value (which most leases are), you will still need to pay its full amount every month — meaning if your lease agreement was $200 per month, you will still need to pay that $200 per month. In addition to this, you will still need to pay for your service contract.
Theoretically, if you continued your month-to-month lease, you could end up paying a lot more money than the machine you are leasing is worth.
There are hidden costs associated with the “buyout” of a lease as well — the copier you are leasing will have a dollar amount that must be satisfied before you can officially own the machine — conversely, if you are sending your machine back to your financial institution, you will be responsible for the shipping costs.
SERVICE COSTS INCREASE AS MACHINES AGE
There is a very simple reason most copiers are replaced after five years — parts begin to wear down at a rate that is unsustainable. Just like a car, you will eventually find yourself spending more time repair your copier than actually using it as the machine ages.
This is the main reason for service contract costs increasing as your lease goes on — more time is needed to maintain that particular machine, needing more parts, more labor, and more attention.
While your monthly cost associated with your copier may fit into your budget currently, this will most likely change as time goes on — leaving you less able to find a new copier that is equipped with your desired features, but still within your purchasing power.
THE OPPORTUNITY COST
Copiers are continually advancing. This does not happen at the behest of manufacturers like Canon or Konica Minolta — the ever-evolving nature of office technology is due to the demands and preferences of workers.
Mobile printing is more important than it ever was before. New copiers from certain series come standard with touchless printing. New levels of encryption protect copiers from the looming and growing threat of cyber attack. Simply put, a copier that was new in 2016 is lacking compared to a contemporary model.
This is why most dealers advise businesses to choose the copier that will fit their business’ needs for the next three-to-five years, not those of the present day.
No matter what — whether you are on a month-to-month lease, or a new lease — you will have expenses associated with your copier. A new copier, however, is less prone to failure, more secure, more feature-rich, and will usually come at a lower cost per month.
For some businesses, a month-to-moth lease can fit their needs for a short period of time while they are determining their best course of action. But for most businesses, a new lease on a new copier makes the most financial sense, and comes with significant benefits to the daily operations of your organization.
If you are curious about which is better for your business, reach out to your dealer.