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:
- 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.”
- 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…..