The Difference Between Renting and Leasing

Which is right for your business?

the difference between renting and leasing

Like many other business owners you may have assumed that your budget won’t stretch to buying a multi-function photocopier.  While that may be true, you may not be aware that it’s possible – and increasingly common – for companies to rent or lease the equipment instead.

If this sounds like the better choice for you, your next decision will be between renting or leasing. Here we give you the facts, pros and cons to each arrangement to guide you to the best option for you.

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Leasing a photocopier

By taking out a photocopier lease you avoid the need to pay out a large chunk of money to purchase a machine. Instead the payments are split into more manageable amounts via a long term payment plan. These payments can be due monthly or, more usually, quarterly for as long as the agreement lasts. The length of the agreement can vary from 12 – 60 months.

Advantages of Leasing a Photocopier

Affordable payments
By cutting out the need for a large upfront payment you can avoid unnecessary strain on your budget or even redirect this money to other areas that need investment. With a financial agreement in place you can plan your regular payments into your budget with no surprises further down the line. Lease payments tend to be lower than rental payments.

Repairs and maintenance
Many lease agreements will also include repairs, maintenance and certain supplies within the payment plan. This means you avoid surprise costs down the line and can rest assured any issues will be dealt with quickly so you can get things back up and running as soon as possible.

Disadvantages of Leasing a Photocopier

A photocopier lease is a long term financial commitment that can be incredibly difficult to get out of. This is true even if your company closes; you will still be expected to complete the payments until the end of the contract.

If you wish to upgrade or downgrade the photocopier you may be charged extra fees to do so.

Once the payments are complete your business will not own the photocopier. However, in some cases, you may be offered the opportunity to purchase the photocopier at a Fair Market Value (FMV).

Renting a photocopier

Renting a photocopier is often mistaken as the same as leasing, but there are key differences. Photocopier rental is a far more flexible and relaxed arrangement that is best suited to businesses with short term needs, e.g. from a few days to a few months. A rental agreement usually runs from month to month and can be cancelled with very little notice (around 30 days).

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Advantages of Renting a Photocopier

Affordable payments
Through rental agreements your business can access the very latest technology without the need for a substantial upfront payment which may be unrealistic for many. This means that even the smaller company can compete with the big budget businesses in terms of functionality and efficiency.

Flexible contract
The flexibility of rental agreements means you are not tied into a long term financial commitment. If you need to cancel the agreement, upgrade or downgrade the machine you can do so with very little notice.

Technology upgrades
Again, because of the short term nature of renting it’s relatively easy to upgrade your machine. As technology moves on or the needs of your business change you can swap a machine for a better model during busy periods or even downgrade to reduce your payments in quieter times. For a business that owns a photocopier this is simply not possible without having to sell an asset which has been depreciating in value since the day it was purchased.

Maintenance and servicing
Rental agreements can include ongoing servicing, maintenance and repairs as part of the monthly payments. It may even cover some supplies like toner which makes managing the budget far easier, i.e. no surprise costs down the line.

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Disadvantages of Renting a Photocopier

Renting a photocopier is not advisable if you intend to use it for a longer period than a few months. The monthly payments are more expensive than those in leasing and, if you rent for long enough, you may pay more than you would have done had you bought the photocopier outright.

The monthly fee that you pay will be determined by the volume of copying / printing that your business needs.  Some arrangements may not include the maintenance contract in the advertised price so be sure to check what is included in your monthly payment and what will be extra.

What’s the right choice for your business?

Both leasing and renting a photocopier provide more financial flexibility than purchasing a machine outright. The choice between the two, however, will come down to a few key factors.

How long will you need it?
Firstly, for what period of time will you be needing a photocopier? If the answer is indefinitely i.e. you want a more or less permanent piece of equipment in your office, then a photocopier lease may be the best option. They are based on long term payment plans, usually between 12-64 months, and therefore have lower monthly / quarterly payment amounts than shorter term rentals.

If, however, there is a possibility that you may need to cancel the arrangement then rental is probably the better option as you will find it very difficult to get out of a lease before the full contract has been completed. If this is the case and / or you only intend to use the machine on on a project by project basis, photocopier rental offers far more flexibility in terms of ongoing technology upgrades and cancellation at short notice. You could also opt for purchasing a used, cheaper machine outright.

Financial Stability
Rental is also an advisable option if your business is newly established or cash flow unreliable, as the long term financial commitment of a lease doesn’t end if your company closes. Ideally, only businesses with stable finances should be entering into long term contracts.

Printing Volume
Rental and leasing agreements are based on a specified copy volume per month often including maintenance, replacement parts and a toner supply. If you only print under 1000 copies a month it is probably not worth entering into either agreement as you could be well served by a desktop printer which do not have particularly high purchase prices. On the other hand, if you print over 50,000 pages per month you may find it more cost effective to purchase your own machine outright.

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Functionality Needed
Remember to do your research around the different functionality available so that you have a clear idea of the equipment you need. For example, scanning, binding, stapling, automatic feeding. This should prevent you ending up with a machine that can’t cope with your requirements or paying an unnecessarily high price for a level of technology you don’t need.

Comparing Quotes
When making any sizeable investment or long term financial commitment it’s really important to compare multiple quotes and make sure the price and service you’re being offered is competitive.

This is where the WhatCost team can help. We have a network of photocopier suppliers across the country who can provide your business with top of the range equipment from the best brands. By sending us a single enquiry today, we can send you up to 4 tailored quotes for the rental, lease or purchase of a machine for your business.

You can then compare the quotes and choose the offer that suits your requirements and budget best. There’s no obligation to use any of the quotes.

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