When it comes to office equipment, leasing can be a great option for businesses especially to small and startup businesses that cannot yet afford to purchase equipment outright (and would not be able to recoup its cost through depreciation or other tax benefits).
Unfortunately, lease agreements are loaded with hidden clauses and tricky language designed to protect the interests of the leasing company rather than the lessee. To help you avoid being caught off-guard by an unanticipated obligation and understand exactly what you’re signing before you sign it, here are four potential problems with leasing a copier that you need to know about beforehand.
Excess mileage charges
One of the critical terms of every lease agreement is the mileage limit. It is the maximum number of miles the equipment can be driven during the lease period. If the machine is driven more than that, you will be charged for each mile that exceeds the limit at the end of the lease.
Excess mileage charges can be a major problem for businesses that need to drive their leased copiers farther than the allotted amount. Generally, leasing companies set the limit of a lease at 10,000 miles per year. That’s a generous limit for most businesses but for some companies, it will not be enough.
The problem is that leasing companies almost never allow lessees to extend the mileage limit. That means you will be charged for each mile over the limit at the end of the lease period. Depending on your lease agreement, you may have to pay the entire amount of the lease in the form of miles-driven charges.
Lack of flexibility in ending your lease
A major disadvantage of leasing a copier (and many other types of equipment) is that you are bound by the contract you sign when you lease the machine. If you want to end your lease early, you will have to pay off the rest of the contract in one lump sum. That can be a major financial burden for small businesses.
And if you want to change the terms of your lease after you’ve already signed the contract, you’re out of luck. Existing leases are almost never negotiable. Moreover, if you don’t like the terms of the lease you’re offered, you may have to settle for even worse terms.
Risk of repairs being treated as excess wear and tear
Another problem with leasing a copier is that the leasing company may decide that certain repairs constitute “excess wear and tear” on the machine. If that happens, you will be responsible for paying for them. If you choose to buy the copier instead, those repairs will be a part of the cost of the machine.
Unfortunately, it is difficult to predict whether a leasing company will make this call. But you can reduce the risk of having repairs treated as excess wear and tear by following proper maintenance procedures.
Know the difference between lease, rent, and buy
The main difference between leasing and renting is that when you rent, you have no claim to the asset itself while a lessee has an ownership stake in the equipment. When recording transactions, it’s easy to get confused when leasing office copiers. Since the company does not intend to own the machine at the end of the lease contract, the transaction should be recorded as a rental and not as a purchase. If you get confused, you’ll end up stuck with the equipment.
If you plan to get copiers for your office in Columbus, you can opt to buy copiers or lease copiers in Columbus. We can give you the option to get the copier that you want. You can contact our local copier leasing services department in your location.
If your Location is around Columbus, you may call us at (614) 210-0800, our personnel for copier leasing in Columbus will assist you. If you are also looking for copier repair services in Columbus, you may contact our copier repair personnel at the same number.
Leasing a copier can be a great solution for businesses that cannot currently afford to purchase the equipment they need. But understand the potential pitfalls before you sign a lease agreement. If you have any questions about what you are signing, speak up. Make sure you understand the terms of your contract, and ask your leasing company to explain anything that isn’t clear.