When replacing or upgrading your printing equipment, you typically have two options to choose from—leasing or buying. When comparing these two options, it becomes clear that leasing printing equipment comes with a multitude of benefits. It is pertinent, however, to have a clear understanding of your leasing options, which usually come in the form of operating leases or capital leases. First, we will briefly review the benefits of leasing over buying (Digital Office Products representatives, as your local office equipment dealer, can explain these benefits in detail). Next, we’ll take a closer look at the two most common types of leases and why they make a better choice when compared to buying new printing equipment.
Benefits of Leasing Print Equipment Over Buying
If your intention is to upgrade or replace equipment once the financing agreement is over, then leasing will always make for the best choice. Consider how quickly technology changes. Do you really want to own outdated tech by the end of your lease? Or, would you prefer to upgrade to the latest model? (Consider too, how easy or difficult it will be to acquire the parts necessary to run your machine—such as toner, ribbons, drum kits, and more—five years after the end of your lease.) Leasing is also beneficial because the debt associated with the purchase won’t show up on your company’s account. This freedom allows you to acquire additional financing for other core business operations. Leasing is also a great option if you are planning to sell your company in the near future.
Types of Equipment Leases
Because there is no one-size-fits-all solution for every company’s printing needs, most dealers offer a variety of equipment leasing options, such as:
- $1 buyout lease
- 10% option lease
- Fair market value lease
- 10% PUT lease
- TRAC lease
Each of these lease types come with their own pros and cons, which you can discuss with your office equipment dealer. However, as mentioned above, operating and capital leases are the most common leases extended to businesses, as they seem to fit the majority of companies’ needs. Let’s take a closer look at each:
This type of lease is ideal for financing equipment that you don’t intend to use for extended periods of time as well as for equipment that has a short shelf life. If you plan on using the equipment and then replacing it with a more modern, up-to-date version once the lease has ended, then an operating lease makes the most sense for you. Keep in mind that the lender keeps ownership of the device with operating leases, taking on the disadvantage of equipment depreciation throughout the term of your lease.
If you don’t intend to replace or upgrade your new equipment at the end of your lease, then a capital lease is a good fit for your company. In most cases, this form of leasing comes with the option for you to buy the equipment after the lease ends. It is usually stated within the lease agreement how much you can purchase the equipment for at the end of the term. Better still is that this option puts both the interest and principle that you paid throughout the agreement toward your purchase price. If you want to own your new printer but you don’t want to pay for all of it upfront, then a capital lease can be a very advantageous form of financing for your business.
If you are in the Washington, D.C. Metro Area and want to learn more about the leasing options that we offer, please contact Digital Office Products today.