Photocopier leasing has been around as long as photocopiers have been available. There has been a number of variations of photocopier finance, some not particularly desirable of fair to the customer (many would state that some early copier agreements were just there to plain rip off the customers). There were of course straightforward honest photocopier lease contracts but there were also agreements that had seemingly endless terms and hugely excessive penalty charges for operating outside of the agreed terms.
Photocopier Leasing Scams
CopyPlan was a form of leasing in the 1980’s that bundled the cost per copy with the cost of machine ownership. Photocopier salesman would often sign customers up to unrealistic minimum billing based on copies per month. The customer would be committed to paying for unused copies for the lifetime of the agreement costing thousands of pounds. On top of this once in this type of agreement the copier supplier would often provide poor quality service or in many cases fold, leaving the customer to double pay for cost per copy or print. CopyPlan was eventually outlawed but not before thousands of companies and organisations had been overcharged by millions of pounds.
Since regulation was introduced into business equipment leasing the vast majority of leases for photocopiers are straightforward clear contracts with fair terms. However, in recent years the idea of CopyPlan may have been reinvented in the form of a “service package” delivered under the guise of “Print Management Service”. Many print management agreements seek to bundle photocopy or printing costs. Charge per copy can be deceptive too with some suppliers actually charging 4 times for a colour copy or print – individually charging each colour, cyan, magenta, yellow and black.
Leasing a photocopier or multifunctional printer can have many benefits to purchasing outright, for a start the impact on cash can be considerable especially on some of the high volume photocopier printers which can run into many thousand pounds. But leasing should always be restricted to the cost of the machine and not include servicing and consumables such as paper. Any lease or plan that does this will almost inevitably end up overcharging, not least because copies and printing volume is predicted to decrease in the next 5 years so any output you commit to now is likely to change significantly.
So why lease?
When your company leases photocopiers of MFP’s the rentals are considered an ongoing business expense and are 100% tax deductible, this means that every penny that you pay for your photocopier leases can be offset against the profits your company makes. Leasing photocopiers is therefore a great way to have both set budgeted payments and also the tax benefits you get with leasing.
When you are considering a new photocopier or multifunctional copier, printer, scanner you will be offered leasing facilities by the supplier. They will calculate the quarterly rental of the new photocopier lease by taking the capital value of the device and multiplying the amount by a lease rate that has been quoted them by the leasing company, this will then determine the amount that your new photocopier will cost per quarter over the term of the lease. Typically you will be quoted lease rates for 36 months (3 years) and 60 months (5 years), a 5 year lease on your new device will be considerably less than the 3 year lease. These are just the standard terms for leasing a new photocopier or multifunctional printer (MFP).
Why buy outright?
Whilst there are many benefits of leasing your new photocopier or multifunctional printer there are some reasons you may prefer to buy instead. If you are cash rich then you may prefer to buy instead of lease, with returns on cash at their lowest in years you may well wish to save on the interest charges that you would attract with a photocopier lease and just make that purchase instead, it may be that your company is yet to make a profit or only makes small profits in which case the tax benefits of photocopier leasing may not be that attractive. The main benefit of buying outright is the cost of ownership is substantially reduced.