Franking Machine: Buying vs Leasing

Find the ideal franking machine for your business by comparing quotes.

franking machine buying vs leasing
Franking machines for small businesses or large have the option of an outright purchase or, as many businesses do, opt to lease one and spread the payments over 3-5 years (on average). Your decision will come down to the specific needs and budget of your business, but there are advantages and disadvantages to consider in both choices.
 
 
 
 

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What are the Advantages of Buying a Franking Machine?

Your business acquires an asset
By purchasing any equipment for your business you are investing in an asset that should improve the efficiency of your operations for years to come.

No monthly / quarterly lease payments
You make a single payment with no need to budget for monthly / quarterly payments.

No contracts
You are not tied into potentially lengthy contracts which are, on average, around 3-5 years.

Cheaper in the long term
Leasing payments over the long term tend to amount to more than the outright purchase price of a franking machine, so there’s a good chance you’ll be saving money by choosing to buy over leasing.

What are the Disadvantages of Buying a Franking Machine?

Large upfront payment
On average to purchase a franking machine you are looking at a cost of anything from £3,000 to over £20,000. This may not be a realistic option for your business and could throw up real problems for your cash flow.

Ongoing Maintenance Costs
When you purchase a franking machine you will then be responsible for any future breakdowns, repairs and maintenance. When you acquire a franking license from Royal Mail you agree to keep the machine in good working order and to hire a professional to carry out annual servicing.

No technology upgrade/downgrades
By committing to a purchase, you are committing to the technology and functionality. The machine that suits your business now may not be suitable in 12 months, especially if your business is newly established or growing at a significant rate.

Franking Machine Purchase Costs

The purchase price of a franking machine will vary depending on the volume of mail items your business needs to frank each day as well as any additional functionality such as automatic envelope handling or internet connectivity. However, as a rough guide, the below figures should give you a good starting point:

Average items of mail (per day) Type of Franking Machine Average Price*
Up to 30 Low volume £995-£3,000
20-100 Mid volume £3,000 – £8,500
100-1000s High volume £8500 – £21,500+

*Prices intended as a representation only; actual quotes will vary from supplier to supplier.

Advantages of Leasing a Franking Machine

No large upfront payment
By leasing a franking machine you sidestep the need for a large upfront expenditure. This can be a huge pressure relief and means you can keep cash flow running as normal through your business.

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Upgrade/downgrade technology
Many leasing agreements will have the option to upgrade or downgrade your machine as the needs of your business change. This usually incurs an extra fee but does mean you aren’t stuck with an obsolete machine as time passes and technology improves.

Breakdown/maintenance service
A leasing agreement will usually include a maintenance and servicing agreement. This means if a problem does develop you are spared the surprise cost and inconvenience of hiring someone yourself.

Affordable payment plans
There are several suppliers on the market offering machines of every volume capacity so there will be an option to suit your business’ requirements and budget. The payments are spread out in affordable chunks so you can budget accordingly.

Option to purchase
Some lease arrangements include the option to own the machine at the end of the agreement, so you are in fact investing in an asset for your business.

What are the Disadvantages of Leasing a Franking Machine?

A lease agreement tends to cover a period of 3-5 years. This is a significant commitment and not one to be made lightly. Make sure you’re able to meet the payments comfortably now and consider possible future scenarios which would make you unable to meet your obligation. For example, the lease arrangement does not end if your business closes; you will still need to continue making the payments.

Franking Machine Lease Costs

As with the purchase of a machine the leasing fees you pay will be dependant on the size, capacity and functionality of the machine. The below figures should give you an estimate to start from:

Average Items of Mail (per day) Volume Level Category Monthly Lease Cost (exclu. VAT)* Total Paid in Lease Over 3 Years*
30 or less Low volume £20 – £30 £720 – £1,080
20 – 100 Mid-volume £40 – £50 £1,440 – £1,800
30 – 500 Mid / High volume £50 – £80 £1,800 – £2,880
500 – 1000s High volume £85-£400+ £3,060-£14,400+

*Prices intended as a representation only; actual quotes will vary from supplier to supplier.

Remember…

Whether you choose to purchase or lease your machine you will also need to budget for ongoing costs like labels, ink, re-crediting costs (a fee for re-crediting your franking machine via a phone-line) and the postage fees.

You also need to ensure that the franking machine supplier you work with is an official, Royal Mail approved supplier.

We strongly recommend comparing multiple quotes to make sure you’re getting the best deal. We can arrange for up to 3 no obligation quotes from the UK’s most trusted franking machine providers. Complete the form below and free quotes within 1 hour.