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Should You Lease a Photocopier?

Photocopier lease periods typically span anywhere from three to five years. It usually involves paying a fixed monthly fee. Since you do not own the photocopier machine, the leasing fee paid to the supplier could be as much as 100% tax deductible.

One of the advantages of leasing is that it doesn’t tie up capital and is cheaper than renting in the long run. If you are confident about covering the monthly lease fee on time for the entire duration of the contract, then photocopier leasing is the way to go. However, if you decide to terminate the contract before the agreement is up, you will be required to pay the full contract fee.

There are two different types of leasing contracts to be aware of:

1. Lease Rental. With this type of lease, the ownership of the machine remains with the leasing company at the end of the contract. This lease involves a monthly fee, which usually includes maintenance services and free upgrading opportunities.
2. Lease Purchase. When the established agreement period expires, you are entitled to the ownership of the machine. It’s important to note that the terms of these contracts vary considerably, and you need to thoroughly check your agreement before signing anything to be sure about the procedure at the end of the lease.

Before leasing a photocopier, you must be familiar with the different options and conditions of the leasing agreements. Normally, those options are provided by the photocopier supplier or a third-party company, which eases the process of leasing.

Another thing to be aware of is that the payment of the service contract goes together with the lease agreement. The service contract covers services such as regular maintenance, repairs, and toner replacements. Ensure the service contract covers not only the mentioned services but also includes parts and labour as well.

Unlike the monthly fixed lease, the service contract payments can either be fixed or be based on monthly usage. Some contracts even include elements of both. Therefore, getting to know the different options, suppliers, and agreements is a necessity, and careful consideration is highly recommended

When the agreement period comes to an end, you will have several choices:

• Purchase the machine
• Return it to the supplier
• Sign a new lease (for the same copier or upgrade to a new machine)

This of course does not mean that upgrading of the machine cannot happen during the leasing period. However, you will be charged an additional fee for doing so.

Pros and Cons of Leasing a Photocopier

Advantages of Leasing:

• Lower fees and total ownership cost
• Possibility of ownership of equipment at the end of the contract
• Tax deductions
• Flexibility in managing cash flow

Disadvantages of Leasing:

• Longer contracts than renting (approx. 3-5 years)
• Upon mid-way termination, full contract fee has to be paid
• Fee when upgrading/downsizing
• Inflexible contract terms with high risk