Understanding Printer Lease Contracts
Explained: How Printer Lease Agreements Work
Printer leasing agreements function similarly to rental agreements, as both involve payment instalments for equipment usage. However, lease agreements provide a set timeframe for agreement and repayment. Rental agreements are typically rolling agreements that continue until either company terminates the agreement.
The Real Cost of Printer Lease Contracts
There are several stories of businesses and schools being stuck with outdated equipment and paying excessive amounts for printer/copier leasing agreements. The reality is that many agreements are oversold or not suitable for the client’s needs, resulting in higher costs. Horror stories of schools spending £35,000 on a £1,000 copier and companies seeing costs triple despite consistent usage are unfortunately not uncommon.
Common Issues with Copier Lease Agreements
Furthermore, copier leasing agreements can also lead to hidden costs that are often not fully disclosed to the client. For example, some leasing companies may charge extra fees for maintenance and repairs that are not covered under the lease agreement. Additionally, some suppliers may charge high penalties for early termination of the lease or for exceeding the monthly copy limit. These costs can add up quickly and cause financial strain on businesses that are already struggling to manage their expenses. As a result, it’s important for businesses to carefully review and understand all the terms and conditions of a leasing agreement before signing, to avoid any unexpected costs or surprises down the line.
Drawbacks of Leasing a Printer/Copier
While previously it was equally common for companies to buy or lease printers/copiers, over 80% of businesses now opt for leasing. Leasing is a more attractive option in today’s economy because of technology, inflation, and consumerism. However, there are some drawbacks to leasing, such as being bound to the lease terms, which some business owners prefer to avoid. If a business needs change, it can be challenging to exit a lease agreement, making it unsuitable for some. Leasing only makes financial sense for those who make 500 or more copies monthly.
Furthermore, leasing a printer/copier also involves additional costs such as maintenance fees, service charges, and possible penalties for excessive usage.
Additionally, leased equipment may be outdated or inferior compared to newer models available in the market, leaving businesses with outdated technology. With the rapid pace of technological advancements, it’s crucial for businesses to have the latest equipment to remain competitive.
Countries Taking Against Aggressive Copier Leasing Contracts
In August 2022, the Federal Court of Australia ruled that nearly 300 clauses in Fuji Xerox contracts entered into since November 2016 were illegal because they were unfair. The affected contracts, which number 34,000, include those for photocopiers and printers with lease contracts. The frustrating clauses include those that make exiting the contract challenging or result in automatic renewals.
What to Look for in a Printer Lease Agreement
When considering printer lease agreements, several factors must be evaluated. Contract length is typically between 12 and 60 months, with 36 months being the standard length. The cost of the lease is based on expected usage, so having a clear idea of the expected usage is crucial. Lease copier contracts differ from fixed rental costs in that they are often based on a cost-per-copy model. It is essential to carefully review the terms and conditions of the lease agreement to avoid unexpected charges.
When considering copier service agreements, it is important to keep in mind the following:
- What services and maintenance are included?
- Are there any usage requirements or penalties for exceeding them?
- What is the price per copy/page, and which toners are included?
- Are there extra charges for heavy toner use or scanning?
Are annual increases reasonable, and are there additional charges for things like admin or maintenance?
- Service agreements should cover spare parts, labour, callouts, response times for repairs, regular maintenance and servicing, and consumables such as toners. Beware of ambiguous leases that may hide additional charges. Consider working with experts like Auditel to navigate these complexities and negotiate better agreements.
