The challenge for startups and small business is not just the set up cost, it’s also the ongoing liabilities necessary to keep the wheels turning. Computers are costly and so too the smart devices, and then most company operations need a minimum of one printer and not only for printing.
The MFC printer, for example, is ubiquitous and that’s because it’s multi-purpose. Business machines are evolving in their features and functions along with everything else – technology-wise! So do you lease or buy your business printer? Both options have advantages and disadvantages, and your decision will depend on your company’s circumstances.
Leasing inevitably costs the business more in the long run, but there’s always a trade-off, e.g. pay more over time but always have the latest version of the product to use or pay the lump sum immediately, and the printer is yours.
The decision to buy or lease business machines and any office equipment is more complex than just looking at the costs; however, it’s the cost that usually drives the decision to buy or lease.
Less Expensive in the Long-Term
When you buy a printer, your business has to spend more money at the moment of acquisition. But, if you take good care of the printer, you will not have to buy another one for a long time.
If you lease a printer, you will be paying each month to use it. Those monthly lease payments will exceed the one-time cost of purchasing your own.
Another long-term benefit of buying a printer is the ability to sell the printer. If you decide that you want to upgrade or go paper-free, you can sell the printer and recover some of the original cost.
Maintenance on Your Schedule
All equipment needs routine maintenance, and it’s your responsibility to do it for any equipment your business owns. While this is relatively straightforward and for the first twelve months all maintenance occurs, over time there’s a chance your printers will miss a routine check or two, and before long they’ll just stop working. This is not the case when you lease a printer or other hardware systems.
When you sign a lease, the lease includes regular maintenance, that’s usually at an added cost.
The leasing agent still owns the printer, they want to be sure it stays in top condition. You have no control over maintenance costs, which add up substantially over time.
Scheduled maintenance will happen as directed, but if the machine breaks, most leasing agents do not send help quickly. You will have to wait until their repair person is available. This could take days, as their people are out on scheduled maintenance visits.
Buying any business equipment or furniture usually comes with tax incentives. Under Section 179 of the IRS code, your business can deduct the cost of assets within the first year.
While this code also applies to leased equipment, your business can deduct a larger amount if you buy the item rather than if lease it.
Expense of Leasing
It doesn’t take much math to figure out that leasing costs more than buying. Let’s say you buy a printer that costs $4000. If you were to lease the printer, you might have to pay $150 per month over three years. The cost of your $4000 printer increased to $5400 if you leased it.
Don’t forget that you probably paid extra for maintenance, too.
If you buy the printer, you will have the upfront cost and your own maintenance costs. But, those costs should not be anywhere near the $1400 extra you will pay if you lease the machine.
Tied to a Contract
If you lease a printer, you will be tied to a long-term contract. Often, the contract is for several years. This means you have to make payments every month for a few years. You will also have to work with the maintenance company for that extended time, too.
When you buy your own printer, you can upgrade at any time. Your printer is an asset that you can sell, too. You cannot do this when you lease; you are stuck with the same model until your lease is completed.
And, many leases are set to auto-renew, so you could have your old printer for even longer!
Make the Choice that Works for You
Research first then talk to an expert, before making a purchase. Leasing may offer you some breathing space, i.e. you get to use a system before committing to buy one. If your business is in its startup phase committing to contracts may not be in your best interests, so make sure you know what’s right for your company at your time of need.