Business owners and managers often find copier leasing the best choice when deciding on yearly budgets. However, when you are leasing a copy machine, you have to be careful how a lease ends and what your company is obliged to do. Here are the end-of-lease terms you can't afford to ignore.
One of the crucial elements of a copier's lease terms revolves around the automatic renewal feature. Like consumer subscription services, you must cancel ahead of time or your contract will automatically renew for another year, possibly longer.
This part of the contract, also known as "the evergreen clause", will cost you big if your plans were to end the lease at the end of the current term. Review the policies about renewal and purchase before finalizing the deal, and don't forget to cancel in advance.
The heavy-duty nature of copy machines, printers, and other office equipment usually means a specialty shipper will be in charge of shipments and returns. Sometimes the supplier uses a shipper that delivers your machine early, but this can end up actually costing you. Should your copier arrive before the term of the lease, you will be on the hook for those costs.
Known as "interim rent," you'll have to pay a pro-rated amount based on the extra days you have the copier in your office. The discrepancy may not be your fault in the slightest, so make sure you know the consequences of accepting a copier earlier than expected.
Should you decide you don't want to renew the lease or buy the copier you've rented, you'll be responsible for sending the machine back to a specified location. Be sure to follow the shipping terms in the contract to the letter.
In many cases, you will not be shipping the copier to the dealer from whom you leased the machine. Lessees are typically required to pack, ship, and insure the copier so it gets back to its destination without incident. Be sure to consider these costs in advance.
Many copier leasing agreements have a buying clause in place at the end of the term. This clause would give you the right to buy the machine at a certain percentage of the fair-market value. Since this price is fixed before the lease begins, it's crucial to agree with the valuation put in writing. Otherwise, if you find yourself with no option but to buy the copier, you'll be stuck with a bad purchase.
In other cases, your lease will mirror an installment payment plan. Since you end up paying for almost the entire value of a copier and maintenance, you may not need to capitalize the copier.
Though leasing a copier machine may make sense for your business, you'll be on the hook for a lot of cash should you miss these lease terms. Go into a lease with your eyes wide open.