Choosing the Right Kind of Copier Lease for Your Business

When your office needs a new copier, you have to make a decision between leasing and buying. The majority of businesses decide that purchasing a copier outright will cost too much because they may want to upgrade in the future. Leasing a copier keeps capital in the bank and provides various tax benefits. Two of the most common leases you will find are the: FMV Lease and the $1 Buyout Lease.

Fair Market Value Lease

An FMV, or Fair Market Value Lease offers lower monthly payments, and it comes with better tax benefits. When the term ends, if you decide you want to buy the equipment, the leasing company will establish a fair value based on existing technology, usage levels of the equipment and current prices of existing equipment. FMV leases are shorter, between 24 to 36 months, but if you decide on a 60 month term, you will lower your payments. The shorter your term, the higher your monthly payments will be. The advantage of an FMV lease is that upgrading is simple.

$1 Buyout Lease

The benefits of a $1 buyout include that at the end of the lease term, you can purchase your copier for one dollar. However, the monthly payments will be higher to reflect that. In addition, customers can claim a depreciation and interest expenses on their taxes. If you do, however, decide on a $1 buyout lease, look at the copier lifespan and make sure it has a long lifetime. Your dealer could give you an estimate on how long it will last when they look at your current and planned usage.

Selecting the right copier for your business budget requires research, but the biggest benefit of leasing is that it saves you from paying a large sum of cash all at once.