Dean Herr

Copier service in the lease | Good or Bad idea?

To Put Copier Service in the Lease or Not in the Lease that is the Question!

This is a great question that we hear all the time. It’s also a difficult question to answer impartially. As a copier salesman it’s a no brainer. Put the service in the lease and “Lock them in”. But, with over 20 years on the technical side of the business (knowing what I know), leaves me torn.

  1. If I put the copier service in the lease won’t my service cost be guaranteed for the term of the lease?

    Good question and the answer is YES. Your Service cost will remain constant throughout the lease for the amount of copies specified in the contract.

  2. And what if I go over the allotted copies?

    This is where you can run into some trouble. By going over your contracted copies (service in the lease) you will begin to incur overages. Now in addition to your monthly lease payment for your copier/MFP and the service in the lease, you will be required to pay the servicing company for all copies made at the agreed upon cpc (cost per copy) in your contract under overages.

  3. OK say I don’t put service in the lease. Won’t my service costs increase every year?

    This is a question you will need to ask your servicing company. Since most service contracts are reviewed/renewed annually, you should find out for how long the initial cpc (cost per copy) will be held for. The next question you’ll want to ask is at what percentage will my contract increase annually thereafter.

Since you’ll be paying interest on the service in the lease, the annual increases (depending on the percentage) might still be cheaper than the locked in copier service in the lease.

What if my service company goes out of business or gives me lousy service?

This is a question I would get unfortunately after the fact. Hopefully this will never happen to you, but sadly it is a reality. At this point your options are limited. You can either:

A) Live with the poor service or in some cases no service.

B) Pay for service on a time and material basis and supplies separately

C) Find a new service company and start a new service contract.

Either way you look at it you’ll be double paying for service.

Now here is where you can win:

Do your homework. Know the company you are dealing with, and make sure they are an Authorized dealer with factory trained technicians. Try to figure your monthly copy volume as close as you can. A good way to estimate your copy/print volume is by how much paper you purchase. A case of paper holds 5,000 sheets so look through your records to see how many cases of paper you purchase monthly or annually. Knowing your monthly or annual volume will give you an idea of how many copies you should have in your lease. Too few copies and you will incur costly overages. Too many copies and that .01 cost per copy (CPC) just increased to possibly .015 CPC or worse yet .02 CPC by committing to far more than you’ll ever use.

Make sure you understand how much of your lease price is for service. Ask your vendor for a proposal that has the hardware lease price and then the service on the side. If you feel comfortable with that vendor and you’re pretty accurate on your copy/print volume, putting the service in the lease shouldn’t be a problem.

Whether you decide to put your copier service in the lease or obtain a separate agreement, make sure your service provider is earning your business every year. They should be working hard for you.

I hope that sheds a bit of light on the question? If you need further assistance or just some advice, please feel free to reach out.

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