Buying vs Leasing a Copier: Which Is Right for Your Business?

# Buying vs Leasing a Copier: Which Is Right for Your Business?

Making the right financing decision for your office copier can significantly impact your business's cash flow and operations. Let's explore the pros and cons of each option.

## The Case for Buying

### Advantages of Purchasing
- **Long-term cost savings**: No interest or financing charges
- **Asset ownership**: Builds business equity
- **No usage restrictions**: Print as much as you need
- **Freedom to modify**: Customize without lease restrictions
- **Potential tax deduction**: Section 179 allows full deduction

### Disadvantages of Purchasing
- **High upfront cost**: $3,000-$50,000+ initial investment
- **Depreciation**: Equipment value decreases over time
- **Maintenance responsibility**: You handle repairs after warranty
- **Technology obsolescence**: Stuck with aging technology
- **Disposal responsibility**: Must handle end-of-life

## The Case for Leasing

### Advantages of Leasing
- **Lower monthly payments**: Preserve working capital
- **Latest technology**: Upgrade at lease end
- **Predictable budgeting**: Fixed monthly expenses
- **Maintenance included**: Often bundled in lease
- **Tax advantages**: 100% deductible as operating expense

### Disadvantages of Leasing
- **Higher total cost**: Interest adds 15-30% to price
- **Long-term commitment**: 3-5 year contracts typical
- **Usage restrictions**: Overage charges for excess prints
- **No ownership**: No equity built
- **Early termination fees**: Expensive to exit early

## Cost Comparison Example

### Mid-Range Color MFP ($15,000 MSRP)
**Buying Outright:**
- Initial cost: $15,000
- 5-year maintenance: $3,000
- Total 5-year cost: $18,000

**Leasing (60 months at 6% APR):**
- Monthly payment: $290
- Total payments: $17,400
- Maintenance included
- Total 5-year cost: $17,400

## Decision Factors

### Buy If You Have:
- Available capital ($10,000+)
- Stable printing needs
- In-house IT support
- Plans to keep 5+ years
- Good credit for loans

### Lease If You Have:
- Limited capital
- Growing/changing needs
- Multiple locations
- Need for latest features
- Prefer predictable expenses

## Hidden Costs to Consider

### When Buying:
- Supplies inventory
- Service contracts
- Software upgrades
- Training costs
- Disposal fees

### When Leasing:
- Overage charges ($0.01-0.10/page)
- Insurance requirements
- Property tax (some states)
- Return shipping costs
- Wear and tear charges

## Tax Implications

### Purchase Tax Benefits:
- Section 179: Deduct full cost in purchase year (up to $1,160,000 in 2023)
- Depreciation: 5-year MACRS schedule if not using Section 179
- Sales tax: Deductible in purchase year

### Lease Tax Benefits:
- Monthly payments: 100% deductible as operating expense
- No depreciation tracking
- Simplified accounting

## Making Your Decision

### Step 1: Assess Your Needs
- Monthly print volume
- Color requirements
- Growth projections
- Cash flow situation

### Step 2: Calculate Total Costs
- Include all fees and charges
- Factor in time value of money
- Consider opportunity cost

### Step 3: Evaluate Vendors
- Compare multiple quotes
- Read lease terms carefully
- Check vendor reputation

### Step 4: Negotiate Terms
- Purchase: Aim for 15-25% off MSRP
- Lease: Negotiate rate and terms
- Include maintenance in deal

## The Hybrid Approach

### Lease-to-Own Options:
- $1 buyout leases
- Fair market value purchases
- 10% buyout options

These combine benefits of both approaches, offering lower monthly payments with eventual ownership.

## Conclusion

There's no one-size-fits-all answer. Buying makes sense for established businesses with capital and stable needs. Leasing works better for growing companies that value flexibility and cash flow preservation. Carefully evaluate your specific situation before deciding.

**Pro Tip**: Get quotes for both options and calculate the total cost of ownership over your expected usage period. Don't forget to factor in maintenance, supplies, and potential overage charges.