If you are in the copier market, and odds are that you are if you are on this page, one common question we hear is a variant of “How do Copier Lease Rates Work?” It really isn’t that difficult, but we’ll try and keep this as simple to understand as possible.
When selling a copier, leasing companies will give me a “lease rate factor” for a client. The better the client, the better the rate, essentially this works into the payment calculation. A common “lease rate factor” for a 3 year return the copier to the lease company lease (also known as a FMV lease or Fair Market Value) is around .029
What happens with this .029? That is the number we multiply by the dollar amount of the equipment costs, so if a copier would cost $10,000 to buy in cash, the monthly lease payment is $290. This does not include service and supplies yet.
Those are generally added into the lease, but there are 3 potential areas of costs for a lease
- Equipment Costs
- Maintenance Costs (the wrench)
- Supplies Costs (the toners, drums, fusers, etc)
So you may see a payment of $290 for the equipment and say a Supplies and Maintenance plan that is $100 for 5,000 included black and white copies. You could also see an “all-inclusive” lease payment of $390 which would be for the equipment and 5,000 black and white copies per month. How it is structured is up to the copier company you are working with.
Now, you come back to the dealer and say that the $390 a month is too high, or they saw on your print assessment that you only spent $365 a month, they will probably show you a five year lease instead so that they could show you savings. Now the common FMV lease factor for a 5 year lease is about .02 — The same $10,000 copier costs $200 a month for equipment and $100 a month for supplies and maintenance. Now you have a $65 per month savings! Isn’t that copier company great!
Leases are another way of getting the money to buy or “rent” a copier. If you think of it as a loan from a bank rather than the way you have to get a copier, then you will probably make wiser decisions. The copier company could sell the copier for $10,000 and then do a supplies and maintenance plan for $100 per month.
You don’t have to lease to get a maintenance plan!