Decoding copier leases, leasing a copier for your business might seem like a simple decision, but as with any business contract, there are layers of complexity. The fine print of copier leases often includes terms and clauses that can significantly affect your bottom line. 

If you’re confused by terms like FMV, $1 buyout, or hidden charges, you’re not alone. But don’t worry—by the end of this blog, you’ll be equipped with the knowledge to navigate the copier lease world confidently. 

Clear Choice Technical Services will break down the different types of copier leases, explore the pros and cons of each, and show you how to maximize the value of your lease, all while avoiding costly pitfalls.

What Are Copier Leases?

First, let’s quickly refresh ourselves on what copier leases are. Copier leases allow businesses to use copiers or multifunction printers (MFPs) without purchasing them outright. Instead, you pay a monthly fee for the lease term, which typically ranges from 36 to 60 months. 

At the end of the lease, you can return the copier, buy it for a discounted price, or trade it in for a newer model. But choosing the right copier lease isn’t just about picking the copier you like and signing a contract. There are several lease types, each with its own set of pros and cons. Let’s dive into the different options.

Understanding Different Types of Copier Leases

There are three main types of copier leases: Fair Market Value (FMV) Lease, $1 Buyout Lease, and Capital Lease. Each has its own benefits and drawbacks, depending on your business needs, budget, and long-term goals.

1. Fair Market Value (FMV) Lease

An FMV lease is one of the most common types of copier leases. With an FMV lease, you lease the copier for a set term (usually 36 to 60 months), and at the end of the lease, you can either purchase the copier for its fair market value, renew the lease, or return the equipment.

Pros of FMV Lease:

• Lower Monthly Payments: FMV leases often have lower monthly payments than other types of leases. This makes it easier for businesses to budget for copier costs.
• Flexibility: At the end of the lease, you have several options: buy the copier, return it, or upgrade to a newer model. This flexibility allows you to adjust based on your business’s changing needs.
• Access to the Latest Technology: With the option to return and upgrade, an FMV lease allows you to always stay up-to-date with the latest copier technology without committing to outdated equipment.

Cons of FMV Lease:

• No Equity: If you return the copier at the end of the lease, you don’t own it, and you won’t get any return on your payments.
• Potential High Buyout Costs: While the monthly payments are lower, the buyout price at the end of the lease may be relatively high. This can make purchasing the copier expensive.

2. $1 Buyout Lease

As the name suggests, a $1 buyout lease allows you to purchase the copier for just $1 at the end of the lease term. This lease type is a good choice if you’re certain you’ll want to keep the copier for the long haul.

Pros of $1 Buyout Lease:

• Ownership: At the end of the lease, you can buy the copier for just $1, which means you’ll own it outright. This can be a good investment for businesses that plan to keep the copier for many years.
• Predictable Costs: Your monthly payments are usually higher than an FMV lease, but you can predict the exact cost of the copier over time.
• Long-Term Savings: Once you own the copier, you won’t have to worry about monthly payments anymore, making it a good long-term financial decision if you intend to keep it for many years.

Cons of $1 Buyout Lease:

• Higher Monthly Payments: Since you’re essentially paying for the copier over time, the monthly payments are typically higher than with an FMV lease.
• Less Flexibility: You’re committing to keeping the copier longer, which means you won’t be able to upgrade to newer models without incurring additional costs.

3. Capital Lease

A capital lease is similar to a $1 buyout lease but aims to transfer ownership of the copier to your business once the lease term ends. You’ll typically make higher monthly payments, but the copier is yours at the end of the lease, often without a significant buyout cost.

Pros of Capital Lease:

• Ownership: Similar to a $1 buyout lease, you’ll own the copier at the end of the term, allowing you to use it as an asset for your business.
• Tax Benefits: In many cases, capital leases allow businesses to claim depreciation on the copier, potentially resulting in tax benefits.
• No Residual Value: The copier is usually fully paid for by the end of the lease, so there’s no residual value or purchase price left to pay.

Cons of Capital Lease:

• Higher Monthly Payments: Like the $1 buyout lease, capital leases come with higher monthly payments than FMV leases.
• No Upgrade Option: Once the copier is yours, it’s yours for good—there’s no option to easily upgrade or trade it in for a newer model without additional expenses.

Key Clauses to Watch for in Your Copier Lease

Now that you understand the main types of copier leases, let’s talk about some key clauses to watch for in the fine print of your contract. Knowing what to look for can help you avoid unpleasant surprises.

1. Excessive Use Charges

Many leases come with a set limit on how many copies or prints you can make monthly. If you exceed that limit, you’ll be charged an excess use fee, which can add up quickly if your business experiences a sudden increase in demand. 

Ensure the allotted pages are sufficient for your needs, or negotiate a higher monthly allotment.

2. Maintenance and Service Fees

Ensure you understand what’s included in your lease’s maintenance and service agreement. Some leases bundle maintenance, while others charge extra for servicing and supplies like toner and paper. 

Don’t assume maintenance is included unless it’s specifically stated in the contract. If possible, negotiate for comprehensive service coverage to avoid additional costs.

3. Early Termination Fees

Life happens, and sometimes businesses need to break a lease early. But be aware that early termination fees can be steep. These fees are often calculated based on the remaining term of the lease, so read the fine print carefully before signing on the dotted line.

4. Automatic Renewals

Some copier leases have automatic renewal clauses, meaning that unless you cancel the lease before the end of the term, it will automatically renew for another period. 

These auto-renewals can lock you into another lease without allowing you to evaluate your needs. Always check the contract for auto-renewal clauses and ensure you have an option to opt out.

How to Negotiate the Best Terms for Your Copier Lease

Negotiating the best terms for your copier lease is essential to getting the most value out of your contract. Here are some tips to ensure you get the best deal:

• Know Your Usage: Before negotiating, understand how much you will use the copier. Will you print thousands of pages per month, or just a few hundred? Knowing your needs will help avoid overpaying for a plan with too many features.
• Negotiate Monthly Payments: Don’t be afraid to negotiate for lower monthly payments. Leasing companies are often willing to work with you, especially if you commit to a longer lease term.
• Ask About Upgrades: If you’re leasing for a few years, inquire about the option to upgrade your copier midway through the lease term. This will allow you to stay up-to-date with the latest technology without signing a new contract every time.
• Request Maintenance Packages: If your leasing company doesn’t offer an all-inclusive maintenance plan, consider negotiating one. This will save you from paying out-of-pocket for unexpected repairs or replacements.

Don’t Let Copier Leases Confuse You—Take Control!

Leasing a copier is a big decision for your business, and it’s essential to make sure you get the best deal. By understanding the different types of leases and being mindful of the fine print, you can make an informed decision that will save you money and provide value in the long run.

However, if you’re unsure which lease option is right for you, or need help negotiating the best terms, Clear Choice Technical Services is here to help. Our team of experts will guide you through the process, helping you choose the copier that meets your needs while saving you money on the lease.

So why wait? Reach out today to get started on your journey to a better copier lease!