1 If you want a copier for 3 years, get a 3 year lease, if you want it for 5 years, get a 5 year lease.
Lease rental periods typically vary in length from 3 or 5 years for photocopiers, 6 years for franking machines and 7 years for telephone systems, and, as a general rule of thumb, the longer the period, the cheaper the monthly payment for you and the more money for the dealer, plus of course you are tied to the dealer for that period.
Listen to your average salesperson, and they will tell you that longer leases mean cheaper payments and the opportunity to pay less before changing to a more current model a little later down the line. This is of course, not true.
If you only want the copier for three years, why lease it for 5? You can negotiate a new lease when you want a new copier
2 Only ever sign fixed term lease agreements, otherwise the onus is on you to cancel.
Yes, you can stay abreast of technology but make no mistake it will not be at the expense of the Finance company or the equipment supplier. When you entered into the agreement, you made a commitment to pay a set number of payments and when you want to end that agreement by upgrade or settlement, YOU are the one who will make the payments you originally committed to.
The salesperson may tell you there is a trade-in allowance of £xyz but invariably that sum is added to the cost of the replacement equipment before calculating the new monthly or quarterly payment; in fact the equipment you have lovingly nurtured for the past however many years, the dealer gets for free because you are paying his bit in your upgrade.
3 Never sign maintenance agreements lasting longer than 12 months at a time.
We have seen some of the less scrupulous dealers out there run a maintenance agreement alongside the lease term, which means when you upgrade the equipment lease, they are entitled to the balance of the maintenance term payments remaining, and they take them too.
4 Take at least 24 hours to read and fully understand any agreement before you sign
If you are unsure, ask and get any reply in writing signed by the owner of the agreement. Don’t feel pressured into signing there and then. If they really want to make the sale, they will wait.
If you follow these simple guidelines you can avoid finding yourself in a situation where changing the leased equipment early leads to you paying in excess of £20,000 for new equipment, which you could probably have bought outright for around £5,000. You may think this is not possible but we know of a company in Essex who leased 5 photocopiers each with a manufacturers’ RRP of £15,200 (Total £76,000) yet the value of the finance leases totalled £1,100,000 (1.1 million pounds) and 2 of those copiers remained in bubble wrap in the customers’ warehouse. So…
If you are unsure about a new agreement you are about to enter into, or you would simply like peace of mind about the agreements you currently have, email us and request a free contract review now