Should I Lease or Buy Office Equipment?

If your business has large volume copying requirements, having an on-site copier or printer will help you keep your operations running smoothly and efficiently. Copiers and printers range from small models that might be equally suited for home use, to large, high-end laser printers with multiple connectivity capabilities that can make thousands of copies daily. These copiers can range from a few thousand dollars to upwards of $10,000, depending upon the features. 

There’s no question that copiers and printers can be costly, particularly for small businesses. Moreover, the starting cost doesn’t reflect the ongoing costs of maintenance, toner, and printer paper. Because these costs can be significant, many businesses opt to lease their laser printers. Leasing is often referred to as “managed services.” This might include additional services and products apart from the actual printer. 

Leasing can be executed in the standard sense, where the machine is effectively rented and the maintenance and management of the machine is the responsibility of the lessee. However, managed services bundles products and resources into the leasing contract, which is often a benefit and convenience to businesses with limited resources. 

The two common types of leases for business equipment include: 

  • Operating Leases: The majority of small businesses select operating leases because they are typically less expensive on a monthly basis than capital leases. This lease gives lessees the opportunity to purchase the equipment outright after the end of the lease agreement. However, the value of the copier will have depreciated markedly due to market demand, the emergence of new technologies, and the condition of the copier, so it will be a less valuable asset for businesses that want to add it to their balance sheets. 
  • Capital Leases: While capital leases aren’t as popular as operating leases, they do offer an advantage to businesses that anticipate significant growth. This is because the leasing contract is treated as a loan as opposed to an equipment rental, so the money going toward the principal and interest is applied to the cost of the equipment itself, and can therefore be applied to the balance sheet of the lessee. While the monthly capital lease rate is more expensive, if the business knows in advance that it is going to purchase the equipment outright, it could be a more cost-effective strategy. 

Leasing Benefits 

Organizations that opt to lease rather than buy equipment do so because it is an effective way to acquire the highest quality equipment at the outset. Companies that have concerns about equipment obsolescence but do not have the funds to purchase the newest copiers and printers outright frequently choose to lease. 

Costs of leasing are significantly lower in the short-term than purchasing equipment outright, though over time it can be costlier. 

Leasing is also more convenient because managed IT service leases bundle maintenance, products, and other expenses into the monthly rate. Additionally, businesses with small IT departments (or no IT departments) don’t have to worry about equipment integration. 

Purchase Benefits 

In the long term, purchasing office equipment is less expensive than leasing, since over time businesses that lease equipment are paying interest on depreciating equipment. Businesses can also recoup a bit of their initial investment, because they can elect to sell their equipment if and when they choose to upgrade. 

Whether you choose to lease or buy your office equipment, Visual Edge IT offers the latest Xerox office printing and scanning technology, from standard office printers and copiers, to production printers, to scanners and much more. For more information about Visual Edge IT managed IT services and suite of Xerox office products, please visit our information page.