Copier and printer leases are a popular way to secure the most important machines for NZ businesses, and for good reason. They grant an organisation access to the latest and greatest office equipment technology – the type that can get a business working more smoothly, efficiently and productively than ever before – while removing the need to service and maintain it, and all for a simple monthly payment.
But as with any legally binding contract, it’s critical that you understand what you’re signing when you sign it. In this guide we’ll walk you through all you need to know about copier leases, so you can enter an agreement with your eyes wide open.
Understanding Copier Lease Agreements
Before we get to the things you should be looking out for, let’s first review a few of the key terms and conditions that you’ll find in copier leases and service contracts.
- Lease duration: The lease period will be a fixed duration, usually in the region of 24-60 months.
- Lease payments: The fee to access the copier, usually paid monthly.
- Servicing and maintenance: A separate service contract will cover the servicing and maintenance of the copier, and will describe the lessor’s obligations for things like repairs and service response times.
- End-of-lease options: At the end of your lease term you may be able to renew the lease, or purchase, upgrade or return the copier.
- Equipment upgrades: You may be able to upgrade to a new copier before the end of the lease.
- Insurance requirements: You may need to insure the leased copier against damage or loss.
- Termination clause: Conditions under which either the lessor or lessee can terminate the lease early.
- Ownership: When you lease a copier, the lessor retains ownership of the equipment.
5 things you should know before you lease a copier
What should you keep an eye out for when reviewing a copier lease? Here are five key considerations, and how to ensure you get a fair deal.
1. Understanding fees and payments in copier contracts
One of the major perks of leasing a copier is the way a large upfront cost is converted into simple monthly payments. But there are a few expenses you need to consider before signing on the dotted line:
- Monthly lease payments: The regular, fixed charge that you’ll pay for the duration of the lease term. Longer leases tend to offer lower monthly payments.
- Service contract fees: A dedicated service contract combines the cost of ongoing maintenance, servicing and repairs into a monthly payment.
- Consumables: You’ll need to cover the cost of consumables like power and paper. The supply of toner and ink may or may not be covered by your service contract.
- Insurance: You’ll need to insure the copier to the level that lease company requires.
Then there are the extra fees that you could potentially incur, including:
- Overage charges: Additional fees that you incur if you exceed the agreed-upon monthly usage limits, such as the number of copies or prints.
- Early termination fees: Penalty fees for ending your current lease agreement before the contract expires.
2. Annual increases and auto-renewal
Speaking of extra fees, two of the more insidious types of charges that you should be looking out for are annual increases and auto-renewal fees.
Annual increases may apply to the service agreement, because over time the cost of servicing the equipment does rise, due to inflation and other economic factors. But an annual increase should never apply to your monthly lease payment, because that would in effect mean that you’re paying more than you did last year for what is now an older piece of equipment.
Some copier lease companies also apply an auto-renewal or extension charge – a one-time fee or monthly price hike that may be applied if you decide to extend your lease or renew your agreement on a new lease. To avoid getting caught out, find out when you are required to deliver a notice of intent to terminate your contract – this is usually 2-4 months before the end of the lease period.
3. Service expectations in NZ copier leases
The level of servicing outlined in your service level agreement (SLA) should reflect your actual usage, because there’s no point in paying for a level of upkeep that you don’t need. Ideally you’ll also be able to adjust this agreement when required – if your copier usage starts to decrease, you should be able to tweak your service agreement to suit.
4. Negotiating your copier lease
Copier leases are generally custom contracts that should reflect the needs, wants, preferences and goals of your business. You are allowed to negotiate key terms, including duration, monthly payments and levels of service.
To negotiate effectively, you should:
- Understand your needs: Assess your copier requirements, including the features and functions you need, and how much you’ll use it. Choose a machine that ticks all the boxes, but avoid overpaying for unnecessary capability.
- Research and compare: At BDL we encourage you to shop around! Get quotes from multiple lessors, but don’t be distracted by the monthly payment figure – work to understand exactly what it covers. Once you have an understanding of a fair rate, you can use that knowledge to negotiate with your preferred vendor, and come to an agreement that suits you both.
5. Ending of lease options and obligations
Your copier lease can end one of four ways:
- Purchase: You purchase the copier you’ve been leasing, either for fair market value or at a price that was agreed upon at the beginning of the lease.
- Renew: You renew your lease and continue to use the same machine. You may be able to renegotiate terms depending on the type of lease.
- Return: You return the copier and end the lease.
- Upgrade: You start a new lease with an upgraded machine.
What if you need to terminate the agreement early? Your obligations will depend on the specifics of your termination clause. It will usually outline fees or buyout charges that apply to early termination – and these will often be comparable to the price of seeing out your contract – but it may also outline conditions that allow you to exit the lease early for little to no charge, such as an early equipment upgrade.
Conclusion
The perks of leasing vs buying make copier leases a popular option for Kiwi businesses. But you need to enter these agreements with your eyes wide open if you are to fully capitalise on these advantages.
Now that you’ve got a deeper understanding of what to look out for in a copier lease, your next job is to find the right lessor – one who offers value and lease flexibility, who comes with a proven track record, who deals in the highest quality machines, and who offers unmatched levels of support.
At BDL we are that printer and copier leasing company. Get in touch with our expert team today to secure your ideal copier or multifunction printer on a lease that works for you.
