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Leasing vs Purchasing Copiers; which is right for your business?

Managed Print

Wondering whether leasing or purchasing a copier is the best decision for your business? Well, you're in the right place. When it comes to leasing or purchasing, many factors can play a role. Are you ready to spend a large sum of money upfront? Or would you rather have a payment plan to pay off the equipment month by month? Do you print frequently or not that often?


Usherwood offers both copiers for purchase or lease as a print servicing company. It comes down to what will best fit your needs as a business. Every business has a unique situation, and Usherwood works with clients to understand their environment and determine which makes sense financially and logistically. 


To determine what is best for your business, here are some of the biggest pros and cons of leasing and purchasing your copier.


Pros of purchasing your copier:

Some of the biggest pros of purchasing your copier are that you don't have any interest rates and you are not tied to any lease with a technology partner.  

No Interest Payments 

Purchasing a device can be a great decision if you have sizable cash reserves. A purchase involves a one-time payment for the price of the equipment. This eliminates the need to make interest payments throughout a payback period, resulting in a better Return on Investment (ROI).


In simpler terms, when you purchase a copier, say for $10,000, you will pay that upfront. This is different from a lease where you will typically pay interest on the copier. For example, say you spend $203 a month for a 60-month lease, it would end up costing you $12,180, which is $2,180 more than if you had paid the 10,000 upfront. If you have the financial ability to pay $10,000 upfront, you will spend less money than you would by the end of your lease. 


Flexibility to Switch Technology Partners 

Purchasing gives you the flexibility to change your maintenance contract to another vendor. If you become dissatisfied with the level of service you are receiving from your current vendor, you can make a change at will. 


Whereas with a lease service, it can be switched still, the ease of switching is contingent on whether it is a value lease (includes print allowance in payment) or a straight-up lease that bills equipment and service separately.  



Cons of purchasing your copier

The cons of purchasing your copier are that you have to pay a large sum of money upfront and your equipment will not be automatically refreshed to ensure it is functioning at the highest quality. 

Large Upfront Expense 

Purchasing equipment can require a significant upfront investment that many organizations cannot readily afford. You can take only a tiny fraction of the purchase value as a depreciable expense each month when it comes to tax implications. This reduces your tax liability, but not nearly as much as with an ongoing lease. For your specific situation, we recommend consulting with your trusted tax professional.  


Equipment becomes outdated 

Suppose you purchase your equipment with the intent of using it for an extended period of time. Typically equipment needs to be replaced every 7 years. After this amount of time, the copier will become outdated and unreliable. 


Once your copier becomes outdated, it will likely need frequent servicing to fix issues that arise. The problem with old copiers is that it can become challenging to find replacement parts. Manufacturers are only required by law to continue making parts for up to 7 years after the new copier was released. 


Typically it can be very hard to find old parts for copiers within 6-7 years of owning the equipment. If parts on your copier were to break, they would cost more to be replaced, and maintenance will be more expensive. This can leave your business caught off guard with a significant expense that was not previously budgeted for.   


Pros of leasing your copier 

The pros of leasing are that you can make small payments month to month and your equipment is always getting refreshed. 

Low Upfront Cost and predictable payments 

Leasing can allow your organization to acquire a multifunction device with little or no upfront cost. From a cash standpoint, leasing allows you to spread out the cost of the equipment over a set period of time. This will enable you to plan all payments on a monthly basis, removing the uncertainty of unexpected repairs or replacements that were not budgeted for. 


Finding a part that goes with an older piece of equipment can be a timely and expensive process. By updating your equipment regularly, this issue can be eliminated through a lease. This can be much easier to budget for and ensure you don't need to worry about high unexpected costs. 


Refreshed equipment 

Leasing enables you to ensure equipment is regularly updated. It’s best practice to update your equipment every 3-4 years. This helps keep your business at the forefront of newer and better technology, including better security, longer life for supplies, and fewer visits for repairs, which keeps you consistently up and running. 


It is the best avenue for those who want to stay current in a rapidly evolving technology landscape. This can also save you from paying costly and unpredictable service fees that typically occur with older equipment.  



Cons of leasing your copier

The cons of leasing your copier are that you don’t own the equipment and that you will end up paying interest on the copier over time. 


You Don’t Own the Equipment 

When you lease, you don’t own the equipment and therefore have no equity in it. At the end of its usable life, you cannot sell the equipment and receive any of your investment back. Lack of ownership may exempt you from certain tax benefits simply because the asset's value is not on your financial books.


You can choose to purchase the equipment after the lease is up, but typically the equipment is out of date and should be refreshed. It may leave you with a piece of equipment that requires expensive repairs.    


High-Interest Payments 

When leasing, you will have to pay a higher cost over time than you paid with an upfront purchase. This is due to the interest incurred in each payment which will cause the overall cost of the equipment to be more expensive for the business. 


These interest payments can tend to vary. For instance, it is essential to keep in mind that interest payments on a lease will be higher if it is a dollar buyout lease vs. Fair Market Value. 



The dollar buyout lease means that you pay a higher monthly fee, and at the end of the lease, you will have the option to buy the equipment out of the lease for a dollar. The fair market value lease is much more common. You pay lower interest on the equipment, and when the lease comes to an end, you simply refresh the equipment to a newer model. 



What are the next steps for leasing or purchasing your new copier?


We hope this article gave you a better idea of which payment structure is best for your business. Whether you're looking to purchase or lease your copier, it is important to consider what type of equipment you might be looking for. There are many different factors to consider before making the decision on what type of copier would best fit your environment. 

As an independent IT solutions provider, we work with many clients to help them determine which type of copier is the right fit for their needs. In order to help you with the lease or purchase of your next copier here are some things Usherwood recommends you review prior: 3 Things to Consider Before Leasing/Purchasing a New Copier.