Copier leases: A few experiences and thoughts

I just finished a renewal of our school’s copier lease, and it was an illuminating process, given that I didn’t know much about copiers and the leasing of before this.

Our school has two copiers – one big “spaceship” style copier that can handle color, multiple paper sizes, three-hole punch, and “saddle-stitch” – i.e. creating bound booklets.  Our second copier is a regular black-and-white copier.

We had two major beefs with our current copier lease company: 

  1. Response time was supposed to be 4-6 hours, but we had increasing delays, up to 8 hours in some cases.  And often what would happen is an agent would arrive, and 15 minutes later declare “Parts are on order, I’ll be back in X days.”
  2. We had an per-machine copy quota system.  On the simple b/w copier, our lease included 18k copies a year, on the large multi-use one, 380k.  However, because of location, the b/w copier was used far more than the other copier, and we got hit with massive overage charges – even though we were twice as much under quota for copies on the large machine.

In reviewing copier lease offerings from small to large shops (including Canon, IKON and Konica-Minolta), I discovered several things:

  • The differentiation among machines is nominal.  Really, unless you’re waaay copy-geek, every company offers machines that will pretty much do the same thing.  Of course, you have to figure out whether faxing from the copier or add’l security system is worth it for you, but you can find equivalent machines across the board.
  • Many leases will be offered for 60 months (5 years).  Our experience – making 400k copies a year on two machines – is that 36 months (3 years) is as far as we could take the machines without having a service person living on-site.
  • Leases are divided into equipment cost, and service.  Equipment costs will be spread over the lease period (in our case, 36 months) with an additional percentage thrown in (since essentially what you are doing is borrowing money from the lease-holding company to pay for the machines).  Yes, this adds to the cost, but is ultimately the only way most smaller companies (and restricted income organizations like non-profits and schools) can afford them.
  • Several leases I saw had great monthly equipment rates, but had a purchase requirement at the end of the lease – essentially, you would be required to pony up about $2k-$3k for the “fair market value” of the copier, at the exact time when it is most useless to you.  We asked for a “$1 buyout” lease – that means they readjust the monthly pricing so that at the end of the lease, we pay $1 and the machine is ours.  Monthly price goes up, but not by a huge amount.  Of course, we’re left with the same problem – now we have a machine we don’t want.  Typically, you can donate or sell these machines for a few hundred dollars for another organization that is even harder up.  (But it’s like donated computer equipment – I would advise any recipient against purchasing something like that).
  • One interesting lease option I saw from IKON was the equivalent to a “rental” – there was no buyout, dollar or fair market value.  The monthly price was a rental price, and at the end of the lease, IKON picked up the machine and took it back.  That’s convenient.
  • Then there’s service and maintenance.  Mostly, service and maintenance was comprehensive – maintenance, troubleshooting labor, parts and toner all included.  Typically the only thing not included was paper and staples. 
  • Most of the maintenance quotes I saw were based on our proposed copying quota.  (Most companies were willing to institute a “organizational” quota, as opposed to a per-machine quota).  So if our proposed copy quota went up or down, so did the proposed maintenance costs – makes sense.  Typically, there was a “per-copy” charge for copies made beyond that quota; and there were opportunities to readjust the quota (and thus the monthly service fee) once a year, or even once a quarter if you discovered you were making far more or far less than you expected.
  • One quote I received, however, had no quota.  They charged per copy out of the gate.  If you sat down and did the math, based on our proposed quota, the average monthly fee came out about the same, but this was never an option we would want.  First, there was no way to predict how much our monthly fee would be (it could change by hundreds of dollars form one month to the next).  Also, towards the end of the year, when we are cash poor, we put on several events as well as send out renewal forms and acceptance letters – all heavy copy work, and not an expense bump we’d want to see at that time of year.

I leave you to sift through your own proposals and eager salespeople.  I am glad to say we chose a local company that’s been in business for over 100 years, that used to be called Typewritorium…..

Advertisements

22 Responses to “Copier leases: A few experiences and thoughts”


  1. 1 smokinggoat March 14, 2008 at 10:39 am

    Of course, not having done this style of negotiation too often before, we sat back, reviewed all the proposals, and then chose the least expensive. What I wasn’t prepared for was every vendor then fighting to get another, *cheaper* proposal in on the second round. It would have made sense to pick our first choice, then then go another round to see if anyone could match it.

    Score “Great Job” for getting a good lease, but a “Needs Improvement” in negotiation skills. The funniest thing is if I wasn’t sitting in a school office, I would have felt more comfortable playing hardball. Context is everything sometimes….

  2. 2 Kevin June 3, 2008 at 7:50 am

    I had a bad lease experience and have decided that we’ll be very cautious in future leases.

    http://kevmccord.typepad.com/weblog/2008/05/leased-copiers.html

    My goal right now is to change our perspective to buying All-In-One (AIO) machines outright for workgroups without a service contract. Buying a mid-range machines outright for most normal, weekly jobs, and leasing only the machine we would use for our large, regular runs. That machine may be a 30k machine in the future so a lease is pretty much unavoidable. Right now we’re outsourcing the jobs such a machine would run.

    I agree that 36 months is the longest to push such a lease.

    I further recommend that you ensure the lease doesn’t auto renew for a period of more than 90 days if you fail to provide notice.

    Negotiating who will pick up the machine and pay to remove it matters.

  3. 3 smokinggoat June 4, 2008 at 10:08 am

    Thanks for this update. It’s stories like this that are helpful to people when they are reviewing their final lease copy agreement. We got screwed by Canon similarly, but only for 3 months (our lease said we had to provide 90 days notice, so we had to pay for 3 extra months). Of course, had I not waited until the last week to finalize a contract with another company, I would have been better off.

  4. 4 Greg Walters July 23, 2008 at 12:00 am

    Nice review –

    “Read the agreement” and negotiate to what you want.

    A lease should be a way to “spread payments over time, for a charge”. That is all.

    Shouldn’t be any auto-renewals, shipping charges, etc.

  5. 5 ecaukn vhqtw September 5, 2008 at 1:34 am

    tdfiqump jyezvbqxa tvumjeqz hjmnpu pxqtnojd xmgnbsylk sgijtn

  6. 6 Leah April 28, 2009 at 3:48 pm

    We’re in the midst of a similar situation as the one mentioned above with Canon; they are asking that our small design firm pay almost twice the buyout to return a printer and end our lease. Its really frustrating. Thanks for this article, your research will serve us all well in the future!

  7. 7 Copier Service Contracts July 27, 2009 at 1:58 pm

    The another most important thing i wanted tell you everybody If you own a small business you need copier or printer for that purpose go for copier lease and maintenance and copier service contracts is best option for for small or home businesses.

  8. 8 william Rabb March 7, 2010 at 1:31 pm

    I have been in the copier leasing industry for 28 years. I have just a few comments and then I look to hear from anyone who reads my comments.

    1) Copier leasing is a good thing if the lease is structured to your advantage the Lessee you the one who is making the lease payments.

    2) I have a list of 20 items regarding contract structure and language within the copier industry that if you don’t cover all 20 you will pay more than you could have paid had you known about this list of 20 items.

    3) Never never Never let your sales person from the copier company structure your lease, and write the terms and conditions to your agreement.

    4) Alaways ask for the interest rate and the actual funding amount the lessor will be paying to the vendor after you sign the lease agreement.

    5) never never never include any service in your lease agreement for any reason.

    6) Never Never Never let any vendor call the leasing company your are making payments to on your behalf. This is a financial agreement between you and the lessor. Not the vendor and the lessor, remember you are in control because you are the company making the payments.

    7) Never pay lease payments to the vendor only pay maintenance payments to the vendor.

    The above list is only a start for structuring the best financial arrangement between you, lessor and vendor. I have developed a management software package designed to reduce cost and structure the best case financial arrangement based on your current fleet and how to transition to a best case replacement solution with the lowest cost of ownership.

    I can support any company large or small in any market in the US. If you have questions or are interested I can be reached at williamrabb@yahoo.com

  9. 9 Jason September 1, 2011 at 4:54 pm

    I think your piece is a well written piece and I think that the consumer gets caught up in the hype of sale and as you mentioned above.I think they do not think big picture, a copier is a copier. SERVICE is king. Everyone says 4-6 hr service times, but not only does that seem to be best case, but also if parts are not on the truck or at the local WH, what good is a fast response time if the machine is down a week anyway? I work on the service side of a “copier company” and really enjoy going to work everyday to hear how happy our customers are with our service vs. their old copier company. A good company will let you demo a unit if your really serious about your purchase. See how well they do with delivery, setup, end user training and service. I know we do, and we seldom have to pick up a demo unless they want a bigger machine.

  10. 10 George London September 6, 2011 at 1:44 pm

    Nice review of your experience. We have used http://www.smartcopierlease.com and it worked quite well for us. They seem to have removed several of the hassles associated with copier leasing – for starters – the need to deal with salespeople. Sorry copier sales people – nothing against you guys, but the success of the internet proves that fewer people want to deal with a “sales” person.

    The other great stuff was they will even pick up their copier at the end of the lease., apart from free delivery and free network installation. I can safely assume that most of these things may be rolled into the cost – I’m not that dumb 🙂

    Price wise – it was fair – not necessarily the greatest deal – but I was not looking for the lowest price. I knew what I wanted and what the general pricing was (having leased copiers in the past). It does feel good to know that their price would be the same for everyone visiting the site – not based on the sales persons whim of the day.

    FYI: We leased a Xerox 7120 btw.

  11. 11 Dennis Littlefield September 6, 2011 at 2:55 pm

    Instead of a large copy machine, I’ve found it far more cost effective to use workhorse printers. How often do you make a copy of an original hardcopy? A small $200 copy machine will do for the very few copies you need. The final cost per copy is the key issue. I found an HP 4050 laserprinter that did 10K copies per toner cartridge and the cost was .17 cents per page. Yes- less than one fifth a cent! I found a Xerox Phaser color printer that cost about 4 cents per page average. Add up all the costs of ownership and divide by all the copies. Most lease agreements for black and white copy machines begin at 7 or 8 cents per page versus .17!

    For the last 10 years I’ve used freecolorprinters.com from Xerox. I’m not paid to say this, but it’s the best option in my mind for any small business print needs. You get great service and a free machine and only pay for the ink.

    Dennis

    • 12 Carmen October 16, 2011 at 2:48 pm

      Sorry Dennis, but your statement appears to be inaccurate. .17 is 17 cents per page. That is the problem most customers don’t examine or understand decimal points. I think what you meant was your HP 4050 is probably running @ .017 or 1.7 cents per page. That’s far from the one fifth a cent portrayed.

      If properly placed, a mid sized BW multifunctional/copier device will run at .025 (2.5 cents) to .035 (3.5 cents). That includes everything, toner, service, and supplies. 7 to 8 cents per page is a improperly placed machine. I hope this sheds a better perspective for shoppers.

      I

      • 13 Dennis Littlefield October 17, 2011 at 9:07 am

        Carmen,

        You are correct, but I have yet to talk with a dealer who can offer anything even close to 2.5 cents. Usually they are double or triple that cost.

        Dennis

  12. 14 Carmen September 21, 2011 at 4:29 pm

    Coming from the Dealer perspective… please read what we recommend: http://www.northeastprintsupplies.com/leasinginformationfaq.html

  13. 15 Mrs Pagura May 7, 2012 at 9:54 am

    Took over managing a small company and of course the leases that went along with it. Just coming to the close of the lease. What is a Biz Hub 352 by Konica worth fair market. It has 185,000 copies made on it to date. We paid nearly 15,000 for the machine and now am told they need another 2125.00 to buy it out at Fair market value. This is an incredible mark up since the machine was worth under $8,000 to begin with. Should one just by a machine out right and pay for service seprately. I can get financing.

  14. 19 Shelly August 3, 2012 at 8:27 am

    Mrs. Pagura, you should look at your future expected volume. Do you have any expectation to expand in the future? Are you going to increase the number of employees, are you going to bring anything in house as far as promotions etc, if you answered yes to any of these questions, your best option is to lease. Buying a machine flat out is a long term investment which could save you money if you expect your company to maintain its current volume and output. The best thing to do is contact your sales representative and get a full needs analysis to see what your options are.

  15. 20 Barbara Hernandez September 19, 2012 at 1:05 pm

    Photocopier leasing definitely has it’s advantages and disadvantages. Where I see a problem is the frustrating trade-off most businesses have to make: either you pay through the nose for a short-term lease (which is more convenient because you don’t know what might change in a few years) or you bite the bullet and commit to half a decade just so you can afford the monthly payments. Either way, there’s a big downside.

    I stumbled upon a site that seems to be trying to do this:
    http://www.un-lease.com

    Not sure when the service will be available but I’m definitely interested. What do you guys think?

  16. 21 ni buick cars dealership November 22, 2012 at 6:13 am

    I was wondering if you ever considered changing the page layout of your blog?
    Its very well written; I love what youve got to say. But
    maybe you could a little more in the way of content so people could connect with it
    better. Youve got an awful lot of text for only having 1 or 2 pictures.

    Maybe you could space it out better?


  1. 1 Leasing copiers | Kgagatbilar Trackback on December 16, 2011 at 8:03 am
Comments are currently closed.




%d bloggers like this: