Frequently Asked Questions
Buying a new copier due to changes in technology?
Lease or Buy?
Fair Market Value Lease vs. $1 Buyout/Purchase Lease?
Servicing my copier?
Certified Pre-Owned Equipment?
Should I buy a new copier every couple of years due to changes in technology?
Buying a new copier every couple of years is not necessary. While you may not be aware of it, your copier is actually a computer that can be completely upgraded. Upgrades take place when the manufacturer (Konica Minolta) switches to a new operating system. Immediately at this time a new program called a print driver is written to accommodate these changes. With this program your copier can be completely upgraded and will be compatible with the new technology in place. Upgrading your copier is an efficient and seamless process. You’ll have the same quality copies without ever knowing any changes in technology have taken place.
The plain truth is, investing in a new copier every few years when technology changes is just another way for the copier company to keep you buying equipment from them.
Should I lease or buy a copier?
This is a question that comes up frequently. Generally speaking, if you have a healthy cash flow, purchasing is always the best option. One of the reasons for that is if you own the equipment you’ll have full control of the machine. Further, you’re not locked into any particular copy company for servicing. There’s also no penalty to move to another company if you are dissatisfied with the service you get from your current provider.
On the other hand, with leasing you’ll find that average lease rates are usually between 8% - 12% of the cost of the equipment. And when you lease equipment, companies want to ensure they have your business for three to five years. So it’s to their advantage if they can get you into a lease agreement.
Is a Fair Market Value Lease (FMV) or a $1 Buyout/Purchase Lease better?
Most copier companies want to put you into a fair market value lease. Many times no other option is available to the customer. A fair market value lease means you pay for the entire machine. And when the lease is up you have two options. You can either pay $500 to ship the machine back to the leasing company or buy the machine all over again from your copier company at a price considered the fair market value. Neither one of these options provides any suitable choices. Keep in mind too, that with the fair market value lease, there is also a pre-payment penalty that you will be responsible to pay. The penalty is about 15% of the total price of the equipment.
However, should you decide to lease, you might as well make it the $1 buyout/purchase lease option. Although this option has a slightly higher monthly payment than the fair market value option, in the long run this option will benefit your business in two very important ways. First of all, at the end of the lease you’ll have no pre-payment penalties like you have with the fair market value lease. And finally and perhaps most importantly, for just a $1 you will own the equipment at the end of the lease.
Does the company that sold me the copier have to service it?
If XYZ Company sold you the equipment they’ll tell you they need to service your copier. However, the truth is you do have options. You can choose to go wherever you’d like to for service.
Most companies have you in a one to five-year maintenance contract that you can’t get out of. Yet, in the state of Ohio, you cannot be billed for services that are not rendered. That means with written notice every maintenance contract legally can be cancelled at the end of 30 days. Northland Business Solutions maintenance agreement includes a 30-day “out” clause.
Should I consider a Certified Pre-Owned copier?
Copiers are a big investment for a business. Most copy machines have a retail value between $15, 000 - $30,000. And the majority of them sell for $10,000 - $20,000. But just like buying a new car, copiers depreciate and the value goes down by about one-half when you make your first copy. Northland has been selling current model top-of-the-line copiers for a third of the cost of retail with a seven-year warranty. These certified pre-owned copiers will arrive at your company in “like new” condition and will perform “like new” as well. Here’s another benefit, at the end of the lease, you’ll own the copier.