Should you lease a copier?

Leasing a copier (also called an MFP, or Multi-Functional Peripheral) is an extended payment option for business or private parties who need to upgrade or replace their current equipment with flexible payment terms.

Leasing allows you to pick a payment term (typically between 12-64 months) and lease type (FMV (Full Market Value) or $1 out).

What is a FMV (Fair Market Value) Lease on my copier or printer?

FMV, or Full Market Value, leases are simple and the most common lease in the copying and printing industry.

An FMV lease gives the customer (that’s you) the option to purchase the machine for total ownership at that time for the machine’s fair market value.  The market value is determined by the bank issuing the lease.

What is a $1 Lease Out?

A $1.00 Lease Out Lease, also know as a “buck out” lease is likely the simplest approach.

The “buck out” lease is identical to the FMV lease, however, at the end of the leasing term, the bank states the value of your machine at the beginning of your lease term (instead of the end) which, of course, is $1.00.

Thus, you own your machine for a dollar when your lease is complete.

The unspoken catch to the “Buck Out”?  Your payments are generally higher than they would be if you had instead chosen the FMV lease.

Should I lease, rent or buy a copier?

Not always an easy question to answer.  It may make sense to lease a machine if you are confident that you are capable of paying your monthly payment, each and every month, and on time until your machine is paid off or your lease is complete.

It can also make sense if your capital equipment budget needs a little wiggle room for additional items.

Leasing (and renting) copiers can also qualify your business for different deductions.  Most standard and accounting practices allow for leasing and renting copier write-offs entirely during the month.  Direct purchasing is depreciated over time.

However, Section 179 offers a counter to this measure.  As always, it’s best to consult directly with a CPA or tax attorney when devising a strategy that works for your business.

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