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What Happens at the End of a Copier Lease? If You Don’t Know, You’ll Pay Too Much

In my day to day work one of the most frequently asked questions I get about copiers is, “what happens at the end of the lease?”.

I have covered this in a previous post on the general topic of leases but I thought it might be good to dedicate a specific post to the topic.

What happens at the end of a copier lease depends on what type of lease it is, fair market value or dollar out/ buck out lease.

At the end of a fair market value lease the leasing company will decide what they believe the fair market value of your copier is based on the original sale price.

If you would like to keep the copier you just pay the leasing company that amount of money and it’s yours.

If you don’t want to pay what the leasing company is asking than you let the leasing company know that and they will send you return instructions via fax or email.

The return instructions will let you know how to ship the copy machine and where to ship copy machine to get it back to them.

The “where” is self explanatory but the how requires you pay special attention to what the leasing company is asking you to do.

For example, how they want the copier packed and how much and what type of shipping  insurance they require you to put on the copier.

Also they will let you know by what date they expect you to have the machine at their location.

Doing exactly as the leasing company has asked is very important.

I have a customer in Westminster, Maryland who recently bought a copier from me.

When he decided to purchase his next copier from me his current vendor told him they would come get the copier and ship it back to the leasing company at no charge.

RED FLAG!! Why would they do that at their cost for a customer who has just decided to go with another copier company.

I instructed my customer to be sure he asks his former vendor for proof of insurance on the shipping as well as proof that they had shipped it.

Unfortunately my new customer didn’t follow my advice and somehow the copier never made it back to the leasing company. Well guess who’s liable for the $2,000 value of that copier. My customer is.

To further complicate the matter his former vendor had just been purchased by another copier company in Baltimore and when he called them they referred him to the new copier company saying that the new company has all of their customer records.

Well when he contacted the new copier company in Baltimore they had no record whatsoever of this customer.

The moral of the story is at the end of a fair market value lease if you decide not to keep the copy machine be sure to control the process of shipping that machine back and do exactly as the leasing company has asked or you can end up like my new customer who now owes the leasing company $2,000 and he no recourse.

Now let’s move on to dollar buyout or sometimes referred to buck-out leases.

This type of lease is simple. At the end of the lease you pay the leasing company one dollar and the copier is yours to keep. Thus the name dollar out copier lease or buck out copier lease.

I hope this helps. If you have any questions feel free to contact me using the form below or by email. ed@edworthington.com.

Thanks for stopping by. Have a fun day.

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Copier Leasing Options for Baltimore Businesses- The 3 Types of Copier Leases

February 10, 2012 Leave a comment

Once you’ve decided to invest in a new copier for your business in Baltimore your next step is to decide whether you’d like to purchase or lease the copier. For tips and information on how to make that decision click over to our article titled “How to Decide if You Should Buy or Lease a Copier for Your Baltimore Businesses”.

If you have decided to lease a copier for your business there are only 3 lease options to choose from and these days only 2 options are truly relevant.

The 3 types of copier leases are:

Fair Market Value– The most common of all copier leases. The way that this lease works is that at the end of the lease term the leasing company will tell you what the fair market value of that machine is and then you can buy it from them for that amount of money.

$1 Buyout Lease– The next most common type of lease. The $1 buyout lease means that at at the end of the lease term you can “buyout” the copier from the leasing company. Now you may be wondering why you would choose any other type of lease over this one. The answer is that this lease will cost you more than the others in interest and fees during the life of the lease. The leasing company will get their money one way or the other.

10% Lease– The least common and very rarely used kind of copier lease.

Which type of lease you choose should be based on your situation and companies needs.

If you have further questions about copier leasing and you would like to speak to a copier leasing expert please contact me, Ed Worthington at 443-570-0414.

Copier Lease vs Buy: How to Decide if You Should Lease or Buy a Copier for Your Baltimore Business

December 10, 2011 Leave a comment

When you are ready to get a new copier for your business there are many good copier companies in the Baltimore metro area to choose from. Once you have selected the copier company one of the first decisions you will have to make is to lease or buy the copier.

Back in the 80’s and 90’s the ratio of buy vs lease was about 50/50.

Today about 80% of businesses, medical practices, and schools (public and private K-12 as well as university) in the Baltimore area lease their copiers.

So why the major increase in the number of leases? The main reason is that technology changes so fast with copier/multifunction devices that it may pay to lease rather than buy.

A copier isn’t a copier anymore. Back in the 80’s and even the 90’s copiers just copied. Today they copy, print, scan, fax, and are an integral part of the document management of a professional office.

With so many businesses attempting to go paperless, the copier/multifunction device becomes a powerful technology tool.

A copier today is a computer that performs multiple document management tasks.

With a lease a business can just budget a certain amount of money for the copier and then every 2-3 years upgrade to a new machine with the latest technology that will help their business become more efficient.

As a bonus to the leasing option, in many cases I save my client money on their new lease due to the fact that technology gets cheaper and more energy efficient.

That’s the scoop on leasing. Now let’s talk about purchasing your copier.

Purchasing your copier also has it’s benefits.

The main benefit is that you save money by not paying fees and interest charges associated with a lease.

Some of my small business clients have expressed that fact that they like to run their business with little or no debt.

Technically a lease is not debt, but you are bound to the terms of the lease so many business owners and professionals consider it the same as having debt.

Another advantage of purchasing a copier is that you can do whatever you want with the copier.

You can keep it for as long as it makes financial sense to do so. With the reliability of today’s technology you could have a machine for several years without having a lease payment.

Also when you purchase a copier you don’t have to return the machine to the leasing company as is the case with most leases.

On the down side of purchasing many small businesses find that $8,000 to $10,000 for a mid to high end machine is a lot of money for to pay up front.

So there you have it. These are the main points to consider when deciding whether to lease or purchase your copier.

As I stated earlier about 80% of my clients lease their copiers for the reasons above.

Whether you lease or buy should be a decision based on your  how you will use the copier/multifunction device as well as your business objectives.

If you have any further questions about leasing or purchasing a copier please feel free to call or email me anytime.

Ed Worthington 443-570-0414 or ed@edworthington.com.