There are lots of advantages to signing a five year deal with your copier supplier.
Here are just some of them.
If you don't notice the theme emerging, here it is : 5 year contracts benefit only one person - the supplier.
The copier dealer will tell you that a uk copier lease agreement makes perfect sense when considered over a 5 year period. Photocopier prices are such that a capital purchase is a big challenge to most people's budgets. But when the figure is split over 5 years, or 20 quarterly payments, it doesn't seem anywhere near as expensive.
But here's the problem : even if(!!) your copier dealer has specified a machine that is up to the job, it is unlikely to last for 5 years - the industry average is 36 months.
So after 3 years, your friendly copier dealer will be back, recommending an upgrade. And when you do this upgrade, the remaining 2 years of financing will be rolled into this new deal, meaning that you are paying interest for 5 years on the remaining balance for a machine you are no longer using.
And now you have to make a starker choice: do you upgrade the equipment to an equivalent model and pay more money, or do you settle for a new machine of lower specification. You can't do both, because you still have the remaining 2 years of your original financing to pay off.
And if you decide that you don't want to do either, you are hamstrung there too - because not only will you have to pay off the remaining 24 months, but you will also get hit with a bill from the copier supplier for 2 years of their service charges.
Still sound like a 5 year deal is cheaper? It only makes sense if you are a supplier.
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Great blog. You advice concerning contracts is great. Another area of the contract that needs to address is the included pages. Mnay copier leeasing companies play tricks with the so called QUOTED per apge cost. They quote 10,000 included pages at lets say 1.5 cents a page. Sound good. However, if you do not use all the 10,000 pages you per page costs jumps because you have to pay the amount that includes the 10,000 pages. If you only use 5,000 pages your cost jumps to 3 cents a page.
ReplyDeleteVery interesting blog. I worked in the copier industry for a long time and I can tell you its really the same type of industry as timeshare. I think blogs like yours are great at informing the consumer. Well done.
ReplyDeleteI have been in the Copier Industry for nearly 20 years in the United States and couldn't agree more. It's time to police the industry. You would be amazed at how publically funded entities (The Tax Payer’s Money) are in Cost Per Copy Agreements with Guaranteed Minimum Monthly Allowances they are nowhere near attaining. We have witnessed this time and time again. Now as an owner for about 5-6 years of my own company, I am committed to not only selling equipment but educating the buyer so whether or not I get their they will have received a fair price, ethical lease agreement, and a reasonable service and supplies agreement. A good example recently is a School District who is in the second year of a 5 Year Cost Per Copy @ .018703 per copy and they Guaranteed 1,000,000 copies per month. That’s $18,703.00 per month. We also believe their volume is nowhere near 1,000,000 per month and are currently helping them determine what it actually is. Now, here in the United States school is closed from about early to mid June and reopens in early September, most of those copiers aren’t even turned on during that period. So for approximately 3 months every year the copier company is collecting $18,703.00 per month, over a 5 year contract that would be approximately 15 months. That’s potentially about $280,545.00 in savings and approximately 15 million unused copies. This has to stop.
ReplyDeleteI couldn't agree more! Great post Jim. At the small office building I own I had to go through the process of getting a new copier. Having leased before it was not something I wanted to get myself into. However I got multiple free prices from www.bestbusinesscopiers.com , and we were able to pick one that fit our needs and budget best. It was a little expensive all upfront but I couldn't get robbed like this anymore.
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