Whether you are a small or large business, the printer is one of the most pivotal pieces of equipment in any office environment. These indispensable machines range from the humble desktop printer through to much larger and more expensive multifunction devices able to print, copy, scan, fax and manage document flows.
Investing in the right printer for your business needs is essential to ensuring your employees have the tools they need to be productive but it can be a costly exercise leading many to ask the question – should you buy or lease a printer?
Is It Better To Buy Or Lease A Printer or Copier?
Like any lease or buy decision, there are drawbacks and benefits to both options. The one you choose will depend on your business, the type of printer/copier you need and the financial preferences of the company.
Commonly it is the higher price points of larger more sophisticated multifunction devices and the associated running costs which lead many businesses to lease rather than purchase. Although small retail machines can be very cheap to buy, users often find the cost of inks and toners is extremely expensive.
In New Zealand, printer leasing is often referred to as managed print services or ‘Managed Service Agreements‘. These agreements would usually include your rental component and service contract (the maintenance and consumables) component in one monthly invoice. Your printer’s service contract typically includes consumables, printer maintenance and mechanical breakdown. A service contract won’t include network support or user damage. Like insurance, a service contract will even out printer running and maintenance costs over time.
Leasing significantly reduces the need to tie up large amounts of working capital and provides the ability to replace the printer as technology advances, and the monthly payment is a fully deductible business operating expense. Buying your printer outright will mean a much larger initial investment, the asset of the equipment will be added to your fixed asset schedule and would usually be expensed over the life of the printer (as depreciation).
Perhaps most importantly, when you purchase your printer outright, you own the equipment to use and dispose of as required. However, even if you purchased the equipment you may still opt for a service contract to cover the running and maintenance costs of the equipment. Scheduled colour maintenance on an office photocopier can run into many thousands in parts and labour.
What Are The Advantages Of Leasing A Printer?
To help you decide which option is right for your business, let’s take a look at the specific advantages and disadvantages of leasing a printer.
- Easy Monthly Payments. Leasing your printer/copier gives you the ability to budget more accurately for the month or year and depending on the structure of the individual contract can offer a pre-determined fixed cost each month. If the machine breaks down there aren’t going to be any budget blowouts or unexpected repair bills to fund.
- Initial Cost Savings. Leasing printers can offer very obvious immediate cost savings which are particularly suitable for recent start-ups, seasonal or small to medium-sized businesses who wish to conserve money. Leasing office equipment is also often popular with larger companies because of the ability to upgrade equipment more frequently and as a way to avoid large amounts of capital being caught up in asset ownership.
- Fixed Monthly Costs. Leasing a printer means you’ll pay for the use of the printer in fixed monthly instalments for the length of the lease contract. At the end of the contract you do not own the printer and it is either returned or you renew the lease and carry on for another contract period. Normally the equipment can be upgraded without penalty during the contract period. The contract can be ended early buying out the remaining value owed on the contract. You may also decide to opt for a contract that also includes a set number of copies per month.
- Tax Deduction. Businesses are able to expense the monthly cost of the printer, whereas if purchasing the printer you would be eligible for only partial tax deduction from the depreciation cost of the asset.
- Maintenance And Repairs Are Taken Care Of. Like any office equipment, multifunction printers require regular maintenance and can sometimes break down. These ongoing repairs can be costly, however, lease agreements usually require maintenance and repair plans be included to ensure the asset is well maintained. This means any repairs required will be the responsibility of the service provider – usually at no extra cost to you!
- Access To Better Technology. Leasing often means you are able to make use of more sophisticated technology that would otherwise be unaffordable as you can choose more expensive equipment without the financial drain of purchasing outright.
- More Frequent Upgrades. Technology has a way of outdoing itself at a rapid pace, and printers and multifunction devices are no exception. Leasing this kind of office equipment usually allows a no penalty upgrade during the term of the lease so you can select a different, more modern product to better suit your current needs.
- Consumables And Extras Bundling. Depending on your provider, leasing a printer with a service contract will mean the cost of consumables, maintenance, accessories and additional equipment are able to be included in the one monthly invoice. You may also opt to include a set number of copies per month or account for those separately on a per page rate.
What About The Disadvantages?
Take a look below for the 4 most common disadvantages in leasing a printer or photocopier.
- No Ownership. Similar to renting a house or hiring a car, leasing means you do not own the printer. After paying all of your monthly fees at the end of the two, three or five years you have nothing to show for your investment.
- Overall Costs Are Higher. It is important to note here that when adding up the total cost of the printer over its lease period versus the initial buy-now price of the machine you will have paid more than the actual value of the printer by leasing. The cost savings of leasing do need to be weighed up from all angles to determine their overall weight in the decision to buy or lease – it is best to talk to your accountant and get professional advice specifically related to your business if this is your main goal when choosing between leasing and buying office equipment.
- Early Exit Penalties. Even if you no longer need the printer, you have to keep paying the lease fees until the contract is up. Or, depending on the terms of the lease you may be able to return the printer, but you will have to pay early exit fees which may end up costing you more than the remaining payments.
- Lease Contracts Are Fixed. Most leasing companies require a minimum lease period of 2-3 years; a lot can happen in this time – you are locked into your contract.
How Much Does It Cost To Lease A Printer/Copier?
In New Zealand, the cost of leasing a printer, copier or multifunction device will depend on the size and capabilities of the machine, the lease contract period and the company you are leasing it from. There will also be other contributing factors such as settlements and penalties of existing maintenance/repair agreements and any added extras negotiated at the time.
Learn more about some of the different types of printers available for lease here.
Over the past 45 years, Business Distributors Ltd has helped countless customers select the right printer and copier lease or buy package for their business. We can offer you experienced advice on whether it is best to lease or buy for your business and provide competitive pricing for both options. If you need help navigating the world of printer and copier lease agreements get in touch with BDL today!