If you’re in the market for a franking machine for your business, one of the primary factors when making your choice is inevitably going to be cost. Franking machines are not cheap pieces of equipment with price tags ranging from around £3,000 up to over £20,000.
The reality is that paying out a large sum of money like this is not a viable option for many businesses. When this is the case it may be a better option to get a franking machine via a leasing or rental arrangement.
What is Franking Machine Leasing?
If you’re looking for a cheap franking machine then leasing is the way to go as it enables you to spread the cost of a franking machine over a period of 3-5 years. You enter into a contract with a supplier to make monthly or quarterly payments for the pre-agreed period. In return you not only have access to the machine via an affordable payment plan but you also receive ongoing support.
This can include an annual maintenance service, discounted supplies, technical support and even machine upgrades in some cases. In some lease arrangements, once the contract has ended you actually own the machine and acquire an asset for your business.
By entering into a franking machine rental you could benefit from:
- Efficient delivery and installation
- Service and maintenance (included in your quarterly or monthly fee)
- Professional setup and training for you and your staff
- Machine upgrades as new models become available.
Advantages of Franking Machine Leasing
Affordable Payment Plan
Paying out a large sum of money to purchase equipment can cause real issues for a business’ cash flow. A franking machine rental means you can avoid this and instead break the payments up into more affordable chunks. The contract term will be pre-arranged so you can budget accordingly. Many lease arrangements also include maintenance and repairs in your monthly or quarterly fee so you won’t be surprised with breakdown costs or annual servicing fees.
If you purchase a franking machine you may receive 100% tax relief on this in the first year. However, by leasing you will receive tax relief on the payments made in every year of the contract.
The Best Technology
If your business needs a franking machine with the very latest in terms of technology, then compromising on a lesser machine is just a false economy. So if you haven’t got the large upfront payment for the best machine, affordable lease payments could be the answer. This means you can get your business the machine it needs rather than the machine you can afford at the moment.
In some leasing arrangements you will have the opportunity to upgrade your franking machine to a newer model as the manufacturer introduces new technology. If you opt to buy a machine you will need to be comfortable that it will continue to meet your business’ needs down the line. And as your purchased machine becomes older and the technology out of date the only remedy will be to sell it at a significantly depreciated value.
Disadvantages of Franking Machine Leasing
When entering into a lease arrangement you are committing to a significant period of time. This usually falls between 3-5 years and contracts can be difficult to get out of. If you want to end your contract early you will usually need to pay a fee. Even the closure of your business does not release you and you will need to continue to pay for the machine until the pre-agreed terms have been met.
Making the Right Choice for your Business
Before agreeing to a franking machine lease for your business there are some important factors to consider.
You’ll need to match your franking machine to your business’ outgoing mail output. There’s no point trying to save money by opting for an inadequate machine that is going to be overworked and as a result more prone to breakdowns. Similarly, you shouldn’t be persuaded to pay out unnecessary money on the highest volume machine if you’re hardly going to use it.
How much do you need from your franking machine? The most advanced franking machines can remove almost any need for manual intervention including sealing, feeding and stacking envelopes. They can also print your business’ logo and a range of marketing messages on the outside. In the top price range, they can do this to 200 mail items a minute.
Demonstration and / or print samples
Any reputable, Royal Mail approved supplier will be able to give you a demonstration of the machine before you commit to the contract. This ensures you’re comfortable with the technology and that it will meet your business’ requirements.
Once you’ve pinpointed the type of franking machine your business needs you’ll need to find your quotes. It’s important that you are comparing at least 2 quotes so you can be sure you’re getting a reasonable price. Take care that the quotes are offering comparable models and ongoing support. Remember to check the prices of re-crediting and consumables like ink and labels too.
End of lease
During the leasing contract the machine is the property of the supplier. However, in some cases, once the payments are complete the machine becomes yours and you gain an asset for your business. In other cases you may be offered the opportunity to purchase the franking machine at the Fair Market Value (FMV).
Costs of a Franking Machine Lease
Lease payments will be based on the volume capacity and level of functionality you need. Each supplier will vary in their pricing structure so it’s important to compare like for like quotes from multiple suppliers. The below table shows the average leasing costs for a franking machine based on our research*.
|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-volumes||£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+|
*Intended as representative figures only. Actual quotes will vary.
We strongly recommend comparing multiple quotes to make sure you’re getting the best deal. We can arrange for no obligation quotes from the UK’s most trusted franking machine providers within 1 hour!