Copier Lease Terminology
How do I know What is the Right Plan?
Many businesses enter into a copier lease agreement to avoid shelling out thousands of dollars upfront for a high-end multifunction copier. By signing a copier lease agreement, you’ll pay a monthly fee for your copier over the term of a lease, which is commonly three to five years in duration. If you aren’t an attorney or don’t have experience securing a copier for your business, an office copier lease might be an intimidating document.
Let’s take a look at some of the challenges you’ll face when entering into a lease agreement.
Navigating a copier lease agreement, Know Your Needs
When you solicit proposals from copier companies, it’s crucial that you know your copier needs. Start with a need’s assessment going in, so you won’t fall for a high-pressure pitch that sticks you with more copier than you need and an expensive monthly lease bill. You can avoid copier lease overkill by accurately assessing how many copies you make in a month. Don’t pay for volume you don’t need. The same goes for other features: consult with co-workers to find out what features they would like.
Don’t go in blind: Understand the Various Leasing Packages & Terminology before you meet with the Copier Company
Copier companies are coming out with different leasing acronyms or new programs. It’s in your best interest to understand what they are talking about, by grasping these lease terms you’ll be better prepared to get the agreement that is right for your company. First, we’ll visit some of the types of leases available and questions to ask.
Device as a Service Program (DAAS) or One Rate Program
This program is an all you can eat buffet for one flat rate. Normally you will get a new copier for a monthly fee. This program includes all the color, black prints, toner and maintenance on the device. With copy/print volumes going down in the industry, these contracts normally will be based on the current print count on your current device. The dealer is gambling that your volumes will go down so in essence the cost per print/copy amount will go up during the duration of the contract. This program really doesn’t give the customer an understanding of what they are getting for the monthly invoice. The advantage for the customer is no metering, unlimited printing and easy to budget. Some questions to ask? What is included with this agreement? Will the lease escalate annually, if so how much? Is there an insurance surcharge? Are there shipping cost? What happens at the end of the Lease? What if I decide to go with another vendor at the end of the lease? What if my volume goes up or down drastically? It is recommended to get a copy of the agreement to read before signing.
Managed Account Program (MAP) or Total Copy Management
These programs are similar to DAAS except you pay for the copy/prints being made. Normally there is a monthly fee which covers the copier and a certain number of black and color copy/prints. Maintenance normally is included to cover toner, labor and parts. Once the number copy/prints agreed on has been reached the customer will pay predetermined excess charge for prints made during the month or quarter. Contracts normally are 3 or 5 years. The advantage for the customer is controlled cost, Some Questions to Ask? Will the lease escalate annually, if so how much? Are there shipping cost? What is your policy if the products don’t’ perform? What happens at the end of the Lease? Is there an insurance surcharge? If I use less volume than in the agreement can we renegotiate? It is recommended to get a copy of the agreement to read before signing.
Managed Print Services (MPS)
This program is a contract to mainly cover the printers currently in your organization. There are many variables here, the contract is based on servicing the printers currently in your business, so there is no cost to lease the printers. If a printer is needed during the duration of the contract the business will purchase and then that device will be placed under the current contract. Some dealers provide assessments to show cost savings to replace the current devices in the business with new, the MPS will then include the cost for the printers and maintenance to cover toner and service. Normally these are five-year agreements. Benefit for customers is a controlled monthly cost to include allotted monthly or annual prints. This normally refreshes an aging printer fleet the cost for the new devices and maintenance is about the same or less than the aging fleet currently being used. Some Questions to Ask? Who owns the equipment when the MPS agreement is over? Is there a cost to return the devices? What happens if we need to add or remove printers to the agreement? Does the agreement go up annually, if so, how much? Is there an insurance surcharge? Is there freight or shipping cost? What happens if we decide to terminate the contract early? Can we renegotiate the agreement is not using all the volume agreed upon? What is your policy if the products don’t’ perform? It is recommended to get a copy of the agreement to read before signing.
All the prior agreements morphed from this original and simpler agreement. The customer makes monthly payments for the new copier or printers, terms are normally 36-60 months. Maintenance is then on a different document to include monthly copy/print volume for black or color. The benefit to the customer is the lease payment stays the same for the duration of the contract and it is easy to see how many prints are being made on a monthly basis. This agreement is a very transparent way for businesses to see what they are being invoiced for. Some Questions to Ask? Are there shipping cost? Are there freight cost? What happens at the end of the lease? Is there an insurance surcharge? Will I own this device when the lease is done? What is your policy if the products don’t’ perform? It is recommended to get a copy of the agreement to read before signing.
Other items to be Aware of with Leases
- Make sure you examine your copier lease agreement for shipping terms. It is not unusual for the lessee to be responsible for picking up the shipping tab, which could exceed $500, at the end of a lease. Who packages the equipment and ships back to the leasing company? What are the specifications for shipping the equipment back to the leasing company?
- When leasing with copy/prints incuded check to see if there is a limit to the amount of toner you can uses, if so do you pay more for the toner, hidden terminology.
- Remember, leases are non-cancellable contracts, so If you try to get out of the contract early what fees will be assessed.
- Pay attention to when payments are due, some companies have invoices that are due as early as ten days (Net 10) and if that doesn’t fit within your payment schedule, the late fees could really add up.
- Ask about insurance, most company’s will ask for a copy of your insurance to make sure the new device is covered under your insurance policy. If not then the leasing company will include an amount to cover that device. Beware, some leasing companies will include an insurance charge even if you provide proof of insurance. Why pay for something twice?
- The recommendation is to check references of the copier company that your going to do business with, if entering into the contract you need to make sure the device will be operational for the term of the agreement.
We just went over four variations of leases; there are many more but all are about the same, it’s just how they are being packaged. As a customer you can go for the buffet of leases or eat what you need. You know your business, by asking questions about the type of lease being offered and reading the agreement prior to signing. You’ll know exactly which option will work for you.
For more information about leasing and leases contact us today! Century Business Products, experts in the office equipment industry and here to help your office operate more efficient while controlling cost.