Lease or Buy Office Technology? Which Is Best For Your Business?

At Fraser, current and potential clients ask a lot of questions about the selection of a copier.  One of the most frequent and important questions we get is, "should I lease or buy?  Which is going to be best for my business?"

We often equate buying a copier with buying a new car (see How Much Does a Copier Cost?).  The decision process that goes into buying both of these big ticket items are very similar.  Both are a significant investment, both are expected to have a long life cycle, both can be tested and seen in showrooms and both need to be maintained.

Acquiring a copier is an important decision for many businesses.  If you decide to lease a copier over the next few years, you can realize a great business opportunity and take advantage of spacing out payments over the years.  On the other hand, you may have cash on hand that is earmarked specifically for your copier purchase, and you can save money by eliminating the interest payments on your copier by purchasing it outright.

In the past, the buy vs. lease ratio for copiers was about 50/50.  At that time, most copiers did one thing...they copied.  Today, copiers (or multifunction devices [MFD] as their name indicates) can print, copy, scan, fax, fold, sort, staple, email and more!  They have become a vital piece in managing document flows and electronic files in a business, becoming the cornerstone of many document management strategies.  With increases in function comes increase in price, which is why today more than 90% of our customers lease their copiers.  Let's look at the differences between buying vs. leasing.

Why should I lease a MFD for my business?

Leasing offers your business flexibility of meeting your cash flow needs, while bundling all other costs such as set-up, installation, training and even sometimes service contracts.  100% of your copier's financing is in one low monthly payment.  Leasing also allows you the productivity of the equipment you require while meeting cash flow needs.  When you lease a copier, you don't have to choose whether to purchase older models or a used machine to save money and fit your budget.  With a lease you can afford to take advantage of the latest technology since you're dividing the cost up over a longer-term payment program.

Take advantage of the economy and betting against inflation.  When you enter into a lease, you sign up for a fixed interest rate.  This means your rate is fixed for the lifetime of your lease agreement.  Even if and when lease or loan rates rise in the future, you will still pay the same rate you originally agreed upon at the signing of your lease.

A lease is a proven financing option to conserve your business capital when purchasing office equipment and technology.  This allows you the opportunity to budget dollars to other important areas of your business.  It also allows you to invest back in your business with things like marketing, staffing, labor and more.

Many times, you can take advantage of a $1 buyout lease option.  What this means is that you pay $1 at the end of your lease, and you can keep your equipment.  The way machines are designed today and depending on how hard your business has used the equipment, you may be able to repurpose this device elsewhere in your businesses while you upgrade to the latest and greatest!  And speaking of upgrades, they are almost always easier when you're in a lease on your office equipment.  Adding to your lease or upgrading your equipment and building it into the term or keeping the same payment amount of your lease is easily achieved with a copier lease.

Why purchase an MFD for my business?

If your business has the capital available, purchasing the MFD may be the best route for you.  The main benefit for purchasing an MFD is that you don't have to pay the interest or finance fees that are involved with a lease.  It also lets you keep your business active with little or no debt.  Finally, if you purchase your MFD, you don't have to return the device at the end of the lease or purchase anything.  The device is yours upon payment.

Key questions to consider when deciding to lease or purchase your MFD

• Who is the leasing company?  There are a ton of options to choose from, and if you are buying from an authorized dealer, they will typically help you to find the best program that suits your business.  Always ask who the leasing company is, how long they've been in business and how long the dealer has been doing business with them.
• What is the term of the lease?  Again, there are a variety of options when it comes to the length of a lease.  Typically a lease will be around three to five years, and the term will have a direct effect on the interest rate you receive and your monthly payment.  It's important to know what those options are before you decide on the term.
• What is the rate?  It's obviously important to know the lease rate because you'll need to know how much interest you'll be paying on top of the actual purchase price of your MFD over the lifetime of your lease.
• Can you save extra cash by extending your lease for a few months?  Even small extensions can dramatically reduce your monthly payment by adding a few months on to your lease.  Consider your offer for a three-year lease (36 months).  Ask your dealer to give you the same equipment but for 39 months.  You'll be surprised by the difference three months can make.
• What is the buy-out at the end of my lease term?  It's important to ask if there will be a fee at the end of your lease, and will you own the device once you have completed paying your lease.  This keeps you informed and on top of your leasing program, and you won't receive any unwelcome surprises at the end of your agreement.
• Are there any special conditions, like upgrading before the term is over?  You may be nearly complete on a five-year lease, but your business is growing and you need to look at more robust equipment now.  The question often comes up if the business has to buy out their old lease before entering a new one.  Talking to your dealer to find the best options they can provide can help make this a reality.

Making the decision to purchase or lease your office technology is an important one, and it's critical that you understand the differences between each alternative and how each will affect your business.  The right decision will meet your financial and business objectives while being a crucial part of your business plan.

A quick action plan when you're looking to acquire a new MFD

1. Decide what type of multifunction copier or printer you need.
2. Do your homework and find out who the best copier companies are in your area and what type of support they provide.
3. Get quotes from multiple companies in order to get the best price.  Make sure you're comparing similar models and features to ensure you're getting an accurate picture.
4. Look at all of your financing options to make the best decision and match your business goals.

When it comes to your best copier dealers in Eastern Pennsylvania and Southern and Western New Jersey, Fraser Advanced Information Systems has been the go-to resource for businesses, non-profits, educational institutions and others for more than 47 years.  With a Net Promoter Score of 91.2, Fraser's customers continue to remain happy, loyal and satisfied with their service and equipment.  In the last six months, more than 2,000 customer surveys have indicated they would recommend Fraser to a friend or colleague.  To learn more about how we can help your business, email us today.