You’ve just been notified by your sales leasing representative that your office equipment (copier) lease expiration is coming up. So now what? You’re probably wondering, “Do I get to keep my equipment if the lease expires? Will the leasing company expect me to return the copier?” The answer to these questions will depend on the type of lease you have. It’s helpful to educate yourself on the options your organization might have so that you can make the most informed decision. It is recommended that you consult with a trusted advisor should any questions arise.
Depending on your agreement, you will have certain options at the end of the lease, such as the following:
- Renew your current lease
- Upgrade to a new device
- Buy out your existing equipment
Let’s take a deeper look at these options. Remember, your professional technology consultant can help you along the way.
Option 1: Renew Your Current Office Equipment Lease after Expiration
Renewing your lease is a convenient way to continue with your current equipment. This type of agreement is typically based on a 12-month renewal term. It is simply a carryover of your existing lease. The only thing you will need to do is inform your current leasing company that you wish to continue with your current lease. Your lender will continue to bill you under the same terms and conditions as your current agreement.
Weigh the pros and cons of keeping your device over getting a new piece of equipment. Some things to consider are:
- What is my monthly expense now that I am nearing the end of my lease?
Familiarize yourself with your current costs now that you’re reaching the latter part of your agreement. It might be worth getting a quote to see if new technology would be more cost-effective.
- Is there new technology available that I’m not getting with my current device?
You’ll want to consider advancements that have been made in technology since you entered into your current agreement. Most leases are 3+ years. You have to ask yourself, “Has anything changed in the way we do business today?”.
- Are there security vulnerabilities with my current equipment?
Manufacturers are constantly making upgrades to their equipment with the most cutting-edge technology and advanced security features.
Do not let the “easy way out” be a failure for your productivity and efficiencies operationally when your office equipment lease expiration comes due.
Option 2: Upgrade to New Equipment
Although renewing your device is a convenient way to continue, you’ll have to ask yourself if it is the best, most cost-effective option?
Our customers often choose to upgrade their equipment over renewing their current lease, and for good reason! Upgrading your device to new equipment can also be a simple process.
An upgrade of equipment enables you to take advantage of the newest technology available. You’ll gain some advantages to security, productivity, email, and scanning capabilities when you upgrade from your current operating systems.
There are many new cloud solutions available through new equipment. Learn about cloud solutions here.
Sure, there’s a little more work involved here, but your trusted advisor can provide the consultative measures to help navigate you through any issues you may encounter. They will help you navigate the steps to:
- Return old equipment
- Set up new equipment
- Training your team on your new device
Ask yourself, “Does the new equipment fit within your current existing expense budget, and will the new equipment provide the efficiencies needed to improve your office environment?” again, you’ll have to weigh the pros and cons.
Option 3: Buy Out Your Existing Equipment after Lease Expiration
As stated before, the option to buy out your current equipment depends on your current commitment – you may or may not have these options available to you. Check your contract and/or consult with your sales professional to help you navigate the buyout structure.
End of leases can be based on:
- Fair Market Value (FMV) Payout
This generally is based on the equipment’s worth at the end of the lease. It is subjective and calculated by the leasing company you are working with.
- The $1.00 Out (or Buck Out)
It is the easiest of all lease term endings. You pay a $1.00 to the leasing company and you own the unit at the end of your lease. The monthly payment for a $1.00 purchase option is more expensive than an FMV payment plan.
- The 10% Buyout
This is a predetermined amount at the end of the lease which is calculated on the amount of the equipment cost when you leased your current equipment.
Remember, buying out the equipment may seem appealing because you’ll no longer have a lease payment. But remember the concerns with this addressed above.
- Does the old equipment fit into your business efficiency structure. As your equipment ages, what does that do to your service costs?
- Do the operational costs of the old equipment fit into the budget structure and what does that cost equate to?
At the end of the day, the answer on what to do when your when your office equipment lease comes up depends on your situation. Regardless of the option you choose, the process should not be complicated. With proper trust and guidance, you can navigate the end of lease pros and cons. Leasing equipment is not always for every company or organization. Make sure it makes sense and fits into your financial structure. Lean on your trusted technology sales consultant. If you have issues or questions that need to be addressed, do not hesitate to call on Advanced Imaging Solutions, Inc.