Buy or Lease an Office Copier? A Guide to Operating vs. Capital Leases
Replacing and improving new technology is a big decision for any company. For instance, office equipment like printers is expensive, so you must budget carefully. Business owners always struggle to balance their finances and operational budgets.
No matter how large or small your business stands, you likely wonder, what is the best path forward? Buy or lease an office copier? This is not an easy choice! That is why in this post, we will compare the pros and cons of buying or leasing a copier and determine which option best serves your long-term goals.
Lease Types: Operating vs. Capital Leases
Your decision will boil down to your specific financial and tax goals. If you choose to opt for copier lease services, you generally have two main choices based on how the IRS views the transaction:
Operating Leases (Fair Market Value Leases)
- Definition: Also known as Fair Market Value (FMV) leases. Many businesses choose this one because of its benefits.
- Key Advantage: The equipment is simply for rent, so the renter does not include the assets in their balance sheets. You pay a lower monthly fee.
- End-of-Term: The renter can buy the rental equipment, but the final price will be computed based on various factors. This option is best for companies who want to lease new versions of equipment constantly.
Capital Leases ($1 Buyout Leases)
- Definition: Known as the $1 Buyout Lease. This lease is similar to a loan, wherein interest and principal payments are made.
- Key Disadvantage: These expenses will all be put into the lessee’s balance sheet, meaning you will pay a higher monthly rate.
- Key Advantage: The buyout price is specified in the agreement at signing. Therefore, in the long run, the predictable cost will be worth it if you intend to own the machine.
Buy vs. Lease: Comprehensive Pros and Cons
| Decision | Advantages (Pros) | Disadvantages (Cons) |
| Leasing (Operating) | Avoids Obsolescence (easy upgrades). Lower monthly fee. No down payment required. Allows you to keep up with costly new technology. Conserves cash flow. | Total cost is often higher (paying maintenance and interest). Contract may hinder scaling (e.g., small company grows rapidly). |
| Buying | More affordable in the long run (no interest paid). Full power and control over usage and maintenance. You can deduct the equipment purchase (not the lessee). | High initial cost strains funds and line of credit. You are responsible for all unexpected, high maintenance expenses. Outdated technology is not easily replaced. |
As businesses evolve, there is always development for at least two years. This is why you need new and updated equipment. However, when you buy, your goal is to use them for a long time, which is not workable for some.
Conclusion
Your decision, whether to buy or lease, will entirely depend on your business needs. Sometimes, buying is feasible, and sometimes leasing is. However, if you are still undecided about what is best, we can help you.
We specialize in assisting businesses with their decision-making in all their technology needs.
If you plan to get copiers for your Austin office, you can opt to buy copiers or lease copiers in Austin. We can give you options for getting the copy machine that you want. You can contact our local copier leasing services department in your location.
For all services in Austin, call Clear Choice Technical Services:
- Phone: (512) 253-7000
- Our personnel for copier leasing in Austin will assist you.
- Additionally, if you look for copier repair services in Austin, you may contact our copier repair personnel at the same number.
