You've determined that your office requires a new multifunction printer (MFP) or copier. Are you debating whether to purchase your copier entirely? Or are you thinking about leasing this essential and frequently costly office equipment?
The question of whether to buy or lease is one that often comes up when a big business decision needs to be made, but it can have a big impact on your company's return on investment. You may have also been considering the advantages and disadvantages of buying and renting your office space.
Since no two firms are alike, there is no one right answer; rather, it depends on your priorities and unique situation.
Whether buying or leasing is always the best option is impossible to explain. There are a few important questions to ask yourself before choosing whether buying or renting a copier is the better choice for your business.
Let's start by talking about the advantages and disadvantages of purchasing an MFP. Making the best choice for your company is crucial because this equipment will play a significant role in your operations.
Ownership is one of the primary advantages of purchasing outright. You are the device's owner after you have paid for it, and you are free to do whatever you want with it. You have the option to call for modifications or tweaks to the equipment.
he purchase price is higher up front. For businesses with tight budgets, leasing enables you to spread out smaller payments over time, which may be more cost-effective. Although there are many financing options available, your company might not be able to afford the interest costs.
Standard upkeep should always be considered in addition to the initial purchase price. A manufacturer's warranty may cover defective parts, but it may also require you to take the device to a local facility or even send it back for repairs.
A copier or printer has numerous moving parts that need to be serviced and maintained on a regular basis, in addition to the occasional repair of a broken part. Will you buy a service contract, or will you pay for these services on a time and materials basis? The predictability of a service contract is a popular choice among consumers, but you should account for this expense nonetheless.
Lastly, you can be left with equipment that can't be sold or used again if technological advancements make it obsolete. Although it probably won't happen right away, if you intend to maintain your equipment for a number of years, you should think about it.
The upfront cost—or rather, the absence of it—is one of the primary justifications for leasing. You can spread out payments over a number of years rather than needing to make a sizable down payment all at once. This might be the greatest way to purchase new equipment without having to make significant budgetary adjustments if your company struggles with cash flow management.
Higher-end equipment that is simply expensive when paying the full cost up front may become more available due to leasing's cheaper instalments. Leasing can be the most cost-effective option if you want the newest technology to work for you.
Even while leasing can result in lower monthly payments, the total cost might end up being more than buying. Furthermore, no property remains at the conclusion of the arrangement. The conditions of the lease you accept and your alternatives once it expires should also be carefully considered. Choose a reliable company with flexible terms and a reputation for offering top-notch service; if not, you run the risk of being forced into a lease that will only annoy you.
Leasing equipment instead of buying has distinct tax advantages. When leasing, the payments are considered to be a pre-tax business expense, which means each time you make a payment, you can deduct the entire payment. However, when you purchase the copier, you can only deduct the machine’s depreciation value. Usually, that would be 40% of the buying price in the first year, followed by 25% in the remaining years, but you should confirm this value for your tax region.