Printer Lease or Buy: How to Decide if You Should Buy or Lease a Printer for Your Sydney Business

In this artical, I will walk you through the process of printer leasing vs. buying and put in your mind what you need to consider when it comes to finding a printer lease in Sydney. After you have read this article, you can make an informative decision quickly. If you are confused on how it works, then this post will help you to find the best deal and correct printer lease for your business.

When you are ready to get a new printer for your business, there are many good printer companies in Sydney that can do the job easily. Once you have selected a printer/dealer company in Sydney or within your local area, you will then need to consider a brand that you are going to use. Regarding the brands, there are 4 or 5 Multifunction printer manufacturers that I have listed below, the list below are the best of the best for MFD printers for businesses of any size.

The major companies out there that are at the top of their game for manufacturing high-end printing and copying machines.

Fuji Xerox – Full Range of Printer and High Printer and Copiers
Kyocera – Full Range of Printer and Copiers, from Desktop to Production Printing
OKI – Excellent Range of Models
Ricoh – Good Range of Models
Konica Minolta – Good Range of Models
Sharp – Good Range of Models

The Printer companies mentioned above do have great products, but the unfortunate thing is you cannot buy directly from them, you must go through one of their partners/dealers. Some dealers only do the one brand and others do multiple brands. It is best to find a brand agnostic dealer that is partnered with 5 – 6 major brands, so you have a greater choice and can find the correct model to fit your business perfectly.

Now let us look at who offers a printer lease and why.

The major manufacturers like Fuji Xerox, Oki, HP, well all of them do not provide printer leases directly, they partner with companies that deal with B2B channels only. The printer lease formed when equipment finance companies realised that they could partner with printer dealers and lease a $4000 – $8000 multifunction copier/printer that includes service and toners for businesses of 10 – 1000 employees for a minimal monthly fee, it was a win-win for the finance companies, manufacturers and dealers.

Let’s look at the pro and cons a Printer Lease

Pros – Leasing

• Your Capital is not spent in up front costs – Your cashflow stays intact
• Toners and Maintenance of the machine are combined into the printer lease
• Your costs per print/copy are significantly lower, in fact much much lower
• 100% tax-deductible – Offset the entire cost
• Easy to upgrade and flexible upgrades within lease term
• Flexible Leasing Terms – 24,36,48 or 60 Month Terms
• Know your costs, which is a big one for businesses

Cons – Leasing

• You do not own the equipment after the lease unless you specify lease to buy out the printer at the end of the lease or term
• You are tied into monthly obligations

Printer leasing is just another term for Managed Print Services

Today about 80% of small businesses in Australia lease their copiers

So why are there so many businesses big or small moving to printer leases?

I do not think it is any one particular reason, as small businesses grow and become more complex in the way that they do business, in particular, the way they use technology to drive that business is always changing and advancing. So your business must have the best technology and today you need an MFP printer that can integrate with your businesses technology. You cannot afford to have a machine that just prints out, and that is it anymore.

Today technology is changing so fast that businesses need to be more robust and agile, which means a device that can not only print, but can also scan, fax, integrate with your Windows server, scan to email, connect to Dropbox or cloud services, advanced card and pin security features. I can go on for a while here, however here is the point, these type of multifunction printers are expensive to buy, and small businesses just can’t afford the high costs, so they turn to printer leases or photocopier rentals.

In today’s world, these type of smarts is fundamentally what your business is running on these days, and that is why most companies are turning to printer leases.

With so many companies attempting to go paperless, the multifunction printer becomes a powerful technology tool.

A multifunction printer today is a high-powered computer that can print and perform with very smart integrations. However each manufacturer of printer brand will have different integration and smarts that are unique to each brand, so it is best to ask and be specific on what you want your MFP printer to do and what you want ti to connect too.

Let Look At This Small Case Study:

A Law firm in Petersham, Sydney
Ability to scan to offsite cloud providers.

Server and Network Integration, automatically update staff directories on the printer.

When a new user is created on a company network and when a user is terminated from the company network (Automation) the directory lists on the printer will be updated. (No more manually entering names and email addresses of your printers)

The use of papercut for swipe card printing and to charge back client costs.

You can see where I am going here, a printer from Officeworks or your local computer shop is just not going to cut it, plus you cannot buy these business type of printing machines in a retail store. A business multifunction printer with great technology smarts that is built for business costs between $5000 to $10,000 to buy outright depending on what speed and other smarts you want. That is why a printer lease is so appealing and affordable for businesses.

Let’s look at some basic numbers.

A high-end printer with all the smarts you could ever think of costs between $3000 to $10,000 to buy outright, which is a significant outlay for businesses. Plus after you have bought the multifunction printer you need to worry about buying the toners, drums and servicing of the machine, which again dips into your cash flow on a monthly basis.

If you can afford to outlay that capital and need an asset on your balance sheet then buying the machine is the right choice for you.

90% of companies do not require an asset like that. They need it to run their business which is a major functional requirement in today’s world.

Businesses can now budget a certain amount of money each month for a high-end multifunction printer/copier, which would not be possible without having the options for printer leasing or printer rentals.

The versatility of a printer lease can be seen after the 2nd year, If you come across a machine that has a function that you need for your business, you can opt to upgrade to a new machine with the latest technology.

This can help any business become more productive and efficient. However, you will have to sign a new lease and have the equipment finance company pay the old lease out. Your printer dealer can help with all of this.

How are 3 questions to ask when Leasing a Printer for the First time.

1. What kind of printer lease are you quoting me on? Lease to Buy or just a general lease where the finance company owns the printer?

100% of the time when leasing a MFP printer you always be offered the General Lease option, unless you ask the dealer that you want the lease to buy option..

The first type of lease is the General Lease. This is the most common of all printer leases. About 90% of the printer leases are typically general leases. The way that this lease works is that at the end of the lease term the leasing company will want you get a new machine with a new lease and start all over again. You get a new machine, and the leasing company gets a new lease.All this happens through the dealer off course

If you don’t want to renew your lease for a newer multifunction printer than you will be required to send the printer back to the dealer or leasing company, which ever way it works with the leasing company. Typically if you lease a newer printer MFP from the same dealer you bought the original printer from then they will usually pick the machine up from your office and pay the shipping charges to send it back to the leasing company.

Printer companies do this as a thank you for leasing another printer through them. This is a helpful service that most dealers offer because if you had to send the printer back yourself which will cost you around $200.00 for a smaller multifunction printer up to $500.00 plus for a larger machine.

The second most common type of lease is the lease to buy type. Now only select few companies go for this option because it is inline with there business strategy.

The lease to buy option means you monthly repayments are paying of the printer. The at the end of the lease there will be a small buyout or market value attached to the device, which you will have to pay to completely own the printer. Now you may be wondering why you would choose any other type of lease over this one. The answer is that this lease will cost you more than the others in interest and fees during the life of the lease but in the end you will far pay less to buy out the printer, whatever it market value is at the time.

So you need to ask what type of lease are you offering?

Again, the general lease is definitely the most common chosen option for businesses.

2. Are the printer and maintenance service agreements rolled into the lease?

When you lease a new MFP printer, you’ll want to put a service and maintenance agreement on the printer for the life of the contract. This ensures your toners are always being delivered, and the machine is always being maintained for it to run smoothly, just like servicing your car.

Typically printer maintenance plans are either billed as part the lease in which case you’ll only get one bill or charged separately from your local dealer in which case you’ll get two separate invoices.

One from the printer company/dealer for the service agreement and one from the leasing company for the lease.

3. Am i paying interest and any other type of fees on the service and maintenance plan associated with the lease?

When you lease a printer, you will pay interest on the base amount of the printer. Just like renting from a store like Radio Rentals or Flexi-rent, this is how the leasing/finance company gets compensated for loaning you the money.

If the maintenance agreement is included with the printer lease, then you might be paying interest and other charges on the service and maintenance contract.

One way is to have the bill for the service agreement sent to you by your dealer. In other words, you pay the local printer/dealer for the service agreement and the pay the equipment leasing company separately. You will get two separate invoices, Think about the options you have, it may be in your best interest to separate the lease and service agreement, so you do not pay interest on the service agreement. Interest in equipment leases sit at around 2.5% to 4.5%, so if you do not mind added cost, by not separating the two, then keep them as one invoice.

The second and best way to handle this is when your printer dealer has an arrangement with the equipment finance company is to ask for the invoice for the lease and the maintenance agreement to be issued from the equipment leasing company, now not all dealers will agree to this. The way this works is that the equipment finance company will collect the money for the maintenance service agreement as part of the lease payment and pass it through to the printer/dealer.

4. Do i pay freight and logistics charges to get toners delivered to me.

All thou many printer/dealers say that everything is included except for paper, that may not be entirely accurate, they may not tell that you are responsible for the shipping charges on all consumables delivered to you. If you do not ask these questions, you may get a surprise invoice sent to you for all the supply charges. It is good to negotiate this avenue as well.

5. What type of lease plan am i on, a cost per copy plan or a minimum amount per month needs to be printed (This one of the most important questions)

Many printer dealers will put you a minimum per month model, which means you have to print a minimum of say 50,000 copies per month or whatever you have negotiated.

All printer dealers will do some due diligence on your current printing. Usually, a sales person will come out and run a quick audit on your current printers. They can easily see how many prints you have done for the previous months, and then they will offer your business a minimum per month model based on the data they got from your current printing devices.

If you do not meet what is set out int the contracts, e.g., the minimum prints per month you still pay the difference, this shocks many businesses when they get the invoice, and it is much higher then anticipated, you must be very careful with this.

Look if you do a lot of printing per month, then a minimum lease contract is worthwhile, but this is generally for large corporations who prints a massive amount per month. If you are a small business, you should alway opt for the cost per copy plan (Pay for What You Use) and negotiate the cost per copy for black and white and colour.

Today the average cost per copy is sitting around .9c (B/W) and 9c (Colour) which far cheaper than anything else out there. So just be careful with one, because if you get it wrong and need to vary the lease, then the dealer/printer company gets a nice paycheck out of it.

Purchasing a multifunction printer (MFP) can also has it benefits for the cash flow rich business

There is enormous benefit by buying your multifunction printers outright. If you are a company that needs 5 – 20 printers/copiers for your business, and you have done your due diligence on the numbers, then purchase them and negotiate a service contract for them, that way you can negotiate the cost per copy.

This option may be better for your business model. Your finance people will crunch the numbers and determine if the interest and charges are more beneficial then deprecating the printers over the life of the printers to zero.

The main benefit is that you save money by not paying fees and interest charges associated with a lease.

First, let’s go through the pro’s and con’s

Pros – Buying:

• Your business owns the Asset, and you can depreciate that printer over its lifetime
• You don’t pay interest
• You can do whatever you want with it, it is yours. It is now a company asset

Cons – Buying:

• You pay for the printer/copier upfront
• You have to keep on buying toners at pretty high prices from the likes of Officeworks and Staples
• Your cost per print/copy for colour is 30c per page which is three times the amount of a printer lease
• Your cost per print/copy for black and white is 10c per page which is ten times the amount of a printer lease
• Repairing and Maintaining your printer/copier is at your expense
• Businesses like the fact they like to run their business with little or no debt. However, the unfortunate truth is, these type of printers are cash flow hungry.

Let’s be clear. A lease is not a debt, but the printer lease contract binds you to the equipment leasing company, many business owners do look at this as having some financial debt.

The big advantage of purchasing a multifunction printer is that you can do whatever you want with it. However, these copiers are big and cumbersome and do require sensitive logistics providers to move the machine for you. The cost is around $140 – $200 around the Sydney metro area, and interstate will incur higher costs.

The other good thing about purchasing MFP printer outright is you can go and shop around for a service and support contract on your purchased machine.

A service and support contract is the add-on component to the printer lease, where the toners, maintenance and breakdown support services are attached to the lease.

Now you can call a few dealers around Sydney or your local city, tell them the model of your printer and negotiate the cost per copy for B/W and colour. A rule of thumb is to get around 0.10c (B/W) and 10c for colour, if you print 1000 b/w, you would only pay $10.00. However if you printed the same amount in colour, the cost would be $100, and that is the amount that will come in on your invoice at the end of the month. What you have used, plus the printer lease repayment.

You can keep it for around five years, you should have fully depreciated off your books by then, this is where you will need to invest in another printer, so you can keep on depreciating the asset over it life, a nice way to minimise your tax. With the reliability of today’s technology, you could keep a machine running for several years without having a lease payment.

When you purchase a multifunction printer, you do not have to return the device to the leasing company as you own the asset.

Many businesses small and big find that a capital investment from $3,000 to $20,000 for a mid to high machine just does not make sense.
That capital can be invested more productive activities for the business, the leasing option is a cheap and efficient one, for most businesses this type of asset does not need to be kept on the balance sheet.

A lot of small businesses will revert to going to Officeworks or your local office shop and will buy a multifunction Brother printer or HP, but what many companies do not realise is that they are paying between $200 – $500 per month on toners. One month of buying toners from office works, you can pay for 4 or 5 months of the printer lease, plus you get an amazing multifunction printer that kills the off the shelves printers. Most businesses can see the benefits of a printer lease straightaway from a cash flow perspective and the easiness of a lease.

So there you have it. Deciding to lease or purchase your printer/copier may sound complicated, but once you know a couple of key elements. You can make an informative and educated decision.

As I stated earlier about 80% of businesses, lease their printer-copiers for the reasons I have just written about.

Whether you lease or buy, you should base your decision on your how and what you are using MFP printer in your business. The day to day running of your business will have some dependency on the multifunction printer and how that interacts with your company and how important that function, only you know.

Here is an infographic from Xerox which i though was pretty cool explaining the productivity of an office.

In conclusion:

So it is pretty clear that leasing a printer that includes toners and service is defiantly the way to go regarding cash-flow and the easiness of the whole process.
Don’t get me wrong, around about 80% of businesses will get a printer lease, but the select few who can afford to purchase the printer/copier outright for the right reasons should do so as well. However, at the end of the day, all businesses want is a device that is always working, can connect into the infrastructure, Fast and has great quality prints, always serviced and don’t need to think too much about it.

If you do not want to think too much about it, then a printer lease is going to be the right choice for you.